Q1 2025 Chemed Corp Earnings Call
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wholly Schmidt: I would now like to hand, the conference over to your host today wholly Schmidt assist.
Speaker Change: Assistant controller. Please go ahead.
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Speaker Change: Good morning, Our conference call. This morning, we will review the financial results for the first quarter of 2025 ended March 31 2025.
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Speaker Change: 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.
Holley Schmidt: Please be advised that today's conference is being I would now like to hand the conference over to your host today, Holley Schmidt, Assistant Controller. Please go ahead.
Please be advised that today's conference is being recorded.
wholly Schmidt: I would now like to hand, the conference over to your host today wholly Schmidt.
Speaker Change: 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.
Speaker Change: <unk> controller. Please go ahead.
Kevin Mcnamara: Good morning. Our conference call this morning will review the financial results for the first quarter of 2025 ended March 31st, 2025.
Speaker Change: Good morning, Our conference call. This morning will review the financial results for the first quarter of 2025 ended March 31 2025.
Speaker Change: 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 April 20, <unk> and in various other filings with the SEC.
Kevin Mcnamara: Before we begin, let me remind you that the Safe Harbor provisions of the Private Securities Litigation Reform Act Applied to this conference. 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 April 23rd and in various other filings with the SEC.
Speaker Change: Before we begin let me remind you that the safe Harbor provisions of the private Securities Litigation Reform Act.
Speaker Change: 95 apply to this conference call during.
Speaker Change: 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 April.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: 23rd and in various other filings with the SEC.
Kevin Mcnamara: 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 April 23rd, which is available on the company's website at chemed.com.
Speaker Change: A reconciliation of these non-GAAP results is provided in the company's press release dated April 23, which is available on the company's website at Chemed Dot com.
Speaker Change: Youre 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.
Speaker Change: I would now like to introduce our speakers for today, Kevin Mcnamara, President and Chief Executive Officer of Chemed Corporation, Mike Whitman, Chief Financial Officer of Chemed, and Nick Westfall, Chairman and Chief Executive Officer of Chemed to VITAS Healthcare Corporation subsidiary.
Speaker Change: 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.
Speaker Change: Conciliation of these non-GAAP results is provided in the company's press release dated April 23rd which is available on the company's website at Chemed Dot com.
Speaker Change: I'll now turn the call over to Kevin Mcnamara.
Speaker Change: Thank you Holly good morning welcome.
Holley Schmidt: I would now like to introduce our speakers for today, Kevin McNamara, President and Chief Executive Officer of ChemEd Corporation, Mike Witzeman, Chief Financial Officer of ChemEd, and Nicholas Westfall, Chairman and Chief Executive Officer of ChemEd's VITAS Healthcare Corporation subsidiary. I will now turn the call over to Kevin McNamara. Thank you, Holley. Good morning.
Speaker Change: Welcome to Chemed Corporation's first quarter 2025 conference call I will begin with highlights for the quarter, then Mike and Nick will follow up with additional details.
Kevin Mcnamara: I would now like to introduce our speakers for today, Kevin Mcnamara, President and Chief Executive Officer of Chemed Corporation, Mike Weitzman, Chief Financial Officer of Chemed, and Nick Westfall, Chairman and Chief Executive Officer of Plummet to VITAS Healthcare Corporation subsidiary.
Speaker Change: I will then open up the call for questions.
Speaker Change: <unk> continued its strong operating performance during the first quarter of 2025.
Speaker Change: I'll now turn the call over to Kevin Mcnamara.
Speaker Change: Admissions during the quarter totaled 18139, which equates to a seven 3% improvement from the same period of 2020 for.
Kevin Mcnamara: Welcome to Chemed Corporation's first quarter 2025 conference call. I will begin with highlights for the quarter, then Mike and Nick will follow up with additional detail. I will then open up the call for questions. PTAS continued its strong operating performance during the first quarter of 2025. Admissions during the quarter totaled 18,139, which equates to a 7.3% improvement from the same period of 2024. Our average daily census, or ADC, expanded to 22,244, an increase of 13.1% when compared to the prior year quarter. These historically good metrics were positively impacted by the $85 million acquisition of Covington Health, which was closed on April 17, 2024.
Kevin Mcnamara: Thank you Holly good morning.
Kevin Mcnamara: Welcome to Chemed Corporation's first quarter 2025 conference call I will begin with highlights for the quarter, then Mike and Nick will follow up with additional details.
Speaker Change: Our average daily census, or ADC expanded to 22244, an increase of 13, 1% when compared to the prior year quarter.
Kevin Mcnamara: I will then open up the call for questions.
Kevin Mcnamara: <unk> continued its strong operating performance during the first quarter of 2025.
Speaker Change: These historically a good metrics were positively impacted by the 80 $85 million acquisition of Covington Covenant Health, which was closed on April 17 2024.
Admissions during the quarter totaled 18139, which equates to a seven 3% improvement from the same period of 2020 for.
Kevin Mcnamara: Our average daily census, or ADC expanded to 22244, an increase of 13, 1% when compared to the prior year quarter.
Speaker Change: Through the end of the first quarter. The Covenant Health acquisition is meeting all of our internal financial projections developed at the time of the acquisition.
Speaker Change: As Nick will discuss further VITAS management continues to successfully execute the strategies required to navigate the Medicare cap at certain of our locations a major part of that strategy is to increase our hospital based divisions admissions from hospitals generally come to US later in their disease trajectory. These short stay.
Kevin Mcnamara: These are historically good metrics were positively impacted by the 80 $85 million acquisition of Covington Covenant Health, which was closed on April 17 2024.
Kevin Mcnamara: Through the end of the first quarter, the Covenant Health Acquisition is meeting all of our internal financial projections developed at the time of the acquisition. As Nick will discuss further, VITAS management continues to successfully execute the strategies required to navigate the Medicare cap at certain of our locations. A major part of that strategy is to increase our hospital-based admissions. Admissions from hospitals generally come to us later in their disease trajectory. These short-stayed patients put a limiting factor on our ability to grow revenue in the EBITDA margin, but do provide additional Medicare cap cushion. Despite this headwind, PTAS continues to achieve above-average growth in revenue in EBITDA.
Kevin Mcnamara: Through the end of the first quarter. The Covenant Health acquisition is meeting all of our internal financial projections developed at the time of the acquisition.
Speaker Change: <unk> put a limiting factor on our ability to grow revenue and EBITDA margin, but do provide additional Medicare cap cushion.
Kevin Mcnamara: As Nick will discuss further VITAS management continues to successfully execute the strategies required to navigate the Medicare cap at certain of our locations a major part of that strategy is to increase our hospital based admissions admissions from hospitals generally come to US later in their disease trajectory. These short stay.
Speaker Change: Might this headwind VITAS continues to achieve above average growth in revenue and EBITDA.
Speaker Change: Our new programs in the Florida counties of Pasco and Marion counties are also a key part of mitigating Medicare cap issues in 2025 and beyond.
Kevin Mcnamara: <unk> put a limiting factor on our ability to grow revenue at an EBITDA margin, but do provide additional Medicare cap cushion.
Speaker Change: We continue to grow admissions in Pasco County, we anticipate taking a first submission in Marion County in mid May.
Kevin Mcnamara: Right. This headwind VITAS continues to achieve above average growth in revenue and EBITDA.
Speaker Change: Now, let's turn to Roto rooter.
Kevin Mcnamara: Our new programs in the Florida counties of Pasco and Marion counties are also a key part of mitigating Medicare cap issues in 2025 and beyond. We continue to grow admissions in Pasco County. We anticipate taking our first admission in Marion County in mid-May.
Speaker Change: We are happy to report that Roto Rooter generated a total revenue increase of one 8% in the first quarter of 2025, when compared to the prior year quarter.
Kevin Mcnamara: Our new programs and the Florida counties of Pasco and Marion counties are also a key part of mitigating Medicare cap issues in 2025 and beyond.
Speaker Change: Gross branch revenue increased three 1% consisting of a branch.
Kevin Mcnamara: We continue to grow admissions in Pasco County, we anticipate taking that first submission in Marion County in mid May.
Speaker Change: Residential revenue, increasing one 7% and branch commercial revenue increasing seven 3%.
Kevin Mcnamara: Yes.
Kevin Mcnamara: Now let's turn to Rotary. We are happy to report that Roto-Rooter generated a total revenue increase of 1.8% in the first quarter of 2025 when compared to the prior year quarter. Gross branch revenue increased 3.1 percent, consisting of branch residential revenue increasing 1.7 percent and branch commercial revenue increasing 7.3 percent. Total leads were down 7.8% in the first quarter of 2025 compared to the same period of 2024. The revenue improvements during the first quarter of 2025 are the consequence of the variety of initiatives undertaken during 2024. As we discussed throughout the course of 2024, those initiatives include a more focused sales approach for our commercial business, maximizing opportunities from the leads we do receive, and an emphasis on quicker response times to residences with possible water restoration opportunities.
Kevin Mcnamara: Now, let's turn to Roto rooter.
Kevin Mcnamara: We are happy to report that Roto Rooter generated a total revenue increase of one 8% in the first quarter of 2025, when compared to the prior year quarter.
Speaker Change: Total leads were down seven 8% in the first quarter of 2025 compared to the same period of 2024. The revenue improvements during the first quarter of 2025 are the consequence of the variety of initiatives undertaken during 2024 as we discussed throughout the course of 2020 for those initiatives.
Kevin Mcnamara: Gross revenue increased three 1% consisting of a branch.
Kevin Mcnamara: Residential revenue, increasing one 7% and branch commercial revenue increasing seven 3%.
Speaker Change: Include a more focused sales approach for our commercial business maximizing opportunities from the leads we do receive.
Kevin Mcnamara: Total leads were down seven 8% in the first quarter of 2025 compared to the same period of 2024. The revenue improvements during the first quarter of 2025 are the consequence of the variety of initiatives undertaken during 2024 as we discussed throughout the course of 2020 for those initiatives.
Speaker Change: And then emphasis quicker response times to residences with possible water restoration opportunities to.
Speaker Change: Summarize the strong results at VITAS continue VITAS management has consistently demonstrated the ability to hire and retain licensed health care professionals at an appropriate pace. This has translated into an extended period of strong growth two new locations in the state of Florida provided a nice growth opportunity for the next few years.
Kevin Mcnamara: <unk> include a more focused sales approach for our commercial business maximizing opportunities from the leads we do receive and then emphasis quicker response times to residences with possible water restoration opportunities to.
Speaker Change: We continue to work diligently to expand our operating scope within Florida as well as the other states that have some form of a certificate of need restrictions.
Kevin Mcnamara: To summarize, the strong results at VITAS continue. VITAS management has consistently demonstrated the ability to hire and retain licensed health care professionals at an appropriate pace. This has translated into an extended period of strong growth. Two new locations in the state of Florida provide a nice growth opportunity for the next few years. We continue to work diligently to expand our operating scope within Florida as well as other states that have some form of Certificate of Need restriction. We are pleased with Roto-Rooter's turn towards a revenue growth trajectory. We are confident that Roto-Rooter maintains its core competitive advantages in terms of excellent brand awareness, customer response time, 24-7 call centers, and aggressive internet presence.
Kevin Mcnamara: Summarize the strong results at VITAS continues.
Kevin Mcnamara: <unk> management has consistently demonstrated the ability to hire and retain licensed health care professionals at an appropriate pace. This has translated into an extended period of strong growth.
Speaker Change: We are pleased with Roto Rooter has turned towards our revenue growth trajectory. We are confident that roto rooter maintains its core competitive advantages in terms of excellent brand awareness customer response time.
Kevin Mcnamara: Two new locations in the state of Florida provided a nice growth opportunity for the next few years.
Speaker Change: 47 call centers and aggressive internet presence.
Kevin Mcnamara: We continue to work diligently to expand our operating scope within Florida as well as the other states that have some form of a certificate of need restrictions.
Mike Whitman: I would like to turn this teleconference over to Mike.
Mike Whitman: Thanks, Kevin.
Speaker Change: VITAS net revenue was $407 4 million in the first quarter of 2025, which is an increase of 15, 1% when compared to the prior year period.
Kevin Mcnamara: We are pleased with Reuters turned towards our revenue growth trajectory. We are confident that roto rooter maintains its core competitive advantages in terms of excellent brand awareness customer response time.
Speaker Change: This revenue increase is comprised primarily of 11 eight.
Kevin Mcnamara: Seven call centers and aggressive internet presence.
Michael Witzeman: I would like to turn this teleconference over to Mike. Thanks, Kevin. VITAS Net Revenue was $407.4 million in the first quarter of 2025, which is an increase of 15.1% when compared to the prior year period. This revenue increase is comprised primarily of a 11.9% increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately 3.2%. The ACQUITY Mixed Shift negatively impacted revenue growth 112 basis points in the quarter. The combination of Medicare cap and other contra revenue changes increased revenue growth by approximately 112 basis points. Average revenue per patient day in the first quarter of 2025 was $207.58, which is 221 basis points above the prior year period.
Speaker Change: I would like to turn this teleconference over to Mike.
Speaker Change: 11, 9% increase in days of care and a geographically weighted average Medicare reimbursement rate increase of approximately three 2%.
Speaker Change: Thanks, Kevin.
Speaker Change: VITAS net revenue was 407 $4 million in the first quarter of 2025, which is an increase of 15, 1% when compared to the prior year period.
Speaker Change: The acuity mix shift negatively impacted revenue growth 112 basis points in the quarter. The combination of Medicare cap and other contra revenue changes increased revenue growth by approximately 112 basis points.
Speaker Change: This revenue increase is comprised primarily of 11 of a 11, 9% increase in days of care in a geographically weighted average Medicare reimbursement rate increase of approximately three 2%.
Speaker Change: Average revenue per patient day in the first quarter of 2025 was $207 58.
Speaker Change: Which is 221 basis points above the prior year period.
Speaker Change: The acuity mix shift negatively impacted revenue growth 112 basis points in the quarter. The combination of Medicare cap and other contra revenue changes increased revenue growth by approximately 112 basis points.
Speaker Change: During the quarter high acuity days of care were two 6% of total days of care, a decline of 22 basis points when compared to the prior year quarter.
Speaker Change: Average revenue per patient day in the first quarter of 2025 was $207 58.
Speaker Change: <unk> EBITDA, excluding Medicare cap totaled $73 million in the quarter, an increase of 15, 9%.
Speaker Change: Which is 221 basis points above the prior year period.
Speaker Change: Adjusted EBITDA margin in the quarter, excluding Medicare cap was 17, 2%, which is 13 basis points above the prior year period.
Michael Witzeman: During the quarter, high acuity days of care were 2.6% of total days of care, a decline of 22 basis points when compared to the prior year quarter. The adjusted EBITDA excluding Medicare cap totaled $70.3 million in the quarter, an increase of 15.9%. adjusted EBITDA margin in the quarter, excluding Medicare cap, was 17.2%, which is 13 basis points above the prior year period.
Speaker Change: During the quarter high acuity days of care were two 6% of total days of care, a decline of 22 basis points when compared to the prior year quarter.
Speaker Change: The financial results. Just discussed include the impact of the Covenant health acquisition, which positively impacted revenue adjusted net income and EBITDA by 3% to 4%.
Speaker Change: Adjusted EBITDA, excluding Medicare cap totaled $73 million in the quarter, an increase of 15, 9%.
Speaker Change: Now, let's turn to Roto rooter.
Speaker Change: Adjusted EBITDA margin in the quarter, excluding Medicare cap was 17, 2%, which is 13 basis points above the prior year period.
Speaker Change: Gross branch revenue increased three 1% in the first quarter of 2025 versus the first quarter of 2024.
Michael Witzeman: The financial results just discussed include the impact of the Covenant Health acquisition, which positively impacted revenue, adjusted net income, and EBITDA by 3 to 4 percent.
Speaker Change: The financial results. Just discussed include the impact of the Covenant health acquisition, which positively impacted revenue adjusted net income and EBITDA by 3% to 4%.
Speaker Change: Roto Rooter branch residential revenue in the quarter totaled $167 2 million, an increase of one 7% from the prior year period.
Michael Witzeman: Now let's turn to road order. Gross branch revenue increased 3.1% in the first quarter of 2025 versus the first quarter of 2024. Roto-Rooter branch residential revenue in the quarter totaled $167.2 million, an increase of 1.7% from the prior year period. The residential revenue increase was driven by a 3% increase in excavation revenue and a 12.5% increase in water restoration. Roto-Rooter branch commercial revenue in the quarter totaled $57.7 million, an increase of 7.3% from the prior year. The commercial revenue increase was driven by a 38% increase in excavation and a 14% increase in water restoration. Offsetting the 3.1% gross branch revenue increase, revenue from our independent contractors declined 6.4% in the first quarter of 2025 as compared to the same period of 2024.
Speaker Change: The residential revenue increase was driven by a 3% increase in excavation revenue.
Speaker Change: Now, let's turn to Roto rooter.
Speaker Change: Gross branch revenue increased three 1% in the first quarter of 2025 versus the first quarter of 2024.
Speaker Change: And a 12, 5% increase in water restoration.
Speaker Change: Roto Rooter branch commercial revenue in the quarter totaled $57 7 million, an increase of seven 3% from the prior year.
Speaker Change: Roto Rooter branch residential revenue in the quarter totaled $167 $2 million, an increase of one 7% from the prior year period.
Speaker Change: The commercial revenue increase was driven by a 38% increase in excavation and a 14% increase in water restoration.
Speaker Change: The residential revenue increase was driven by a 3% increase in excavation revenue.
Speaker Change: 12, and a 5% increase in water restoration.
Speaker Change: Offsetting the three 1% gross branch revenue increase revenue from our independent contractors declined six 4% in the first quarter of 2025 as compared to the same period of 2024.
Speaker Change: Roto Rooter branch commercial revenue in the quarter totaled $57 $7 million, an increase of seven 3% from the prior year.
Speaker Change: The commercial revenue increase was driven by a 38% increase in excavation and a 14% increase in water restoration.
Speaker Change: Our independent contractors are generally smaller operations in middle market cities in.
Speaker Change: In most instances they do not have the capability to perform the add on business that is currently the primary driver of revenue growth at Roto Rooter branches.
Speaker Change: Offsetting the three 1% gross branch revenue increase.
Speaker Change: Revenue from our independent contractors declined six 4% in the first quarter of 2025 as compared to the same period of 2024.
Speaker Change: Adjusted EBITDA Roto rooter in the fourth quarter first quarter of 2025 totaled $59 2 million a decrease of two 4% compared to the prior year quarter.
Michael Witzeman: Our independent contractors are generally smaller operations in middle market cities. In most instances, they do not have the capability to perform the add-on business that is currently the primary driver of revenue growth at Roto-Rooter Branch. Adjusted EBITDA at Roto-Rooter in the first quarter of 2025 totaled $59.2 million, a decrease of 2.4% compared to the prior year quarter. The adjusted EBITDA margin in the quarter was 24.7%. The first quarter adjusted EBITDA margin represents a 108 basis point decline from the first quarter of 2025. The 7.3% increase in commercial revenue and the slight decline in EBITDA margin during the first quarter of 2025 were driven by the same factors.
Speaker Change: Our independent contractors are generally smaller operations in middle market cities in most instances they do not have the capability to perform the add on business that is currently the primary driver of revenue growth at Roto Rooter branches.
Speaker Change: Adjusted EBITDA margin in the quarter was 24, 7%.
Speaker Change: First quarter adjusted EBITDA margin represents a 108 basis point decline from the first quarter of 2024.
Speaker Change: Adjusted EBITDA at Roto Rooter in the fourth quarter first quarter of 2025 totaled $59 $2 million, a decrease of two 4% compared to the prior year quarter.
Speaker Change: The seven 3% increase in commercial revenue and a slight decline in EBITDA margin during the fourth quarter of 2025 were driven by the same factors.
Speaker Change: Overall commercial business is generally performed at a slightly lower margin than residential business. Additionally.
Speaker Change: The adjusted EBITDA margin in the quarter was 24, 7%.
Speaker Change: The first quarter adjusted EBITDA margin represents a 100, an eight basis point decline from the first quarter of 2024.
Speaker Change: Additionally.
Speaker Change: Roto Rooter management received feedback from our commercial sales force that we could potentially drive additional excavation work, if we price to that work less aggressively.
Speaker Change: The seven 3% increase in commercial revenue and a slight decline in EBITDA margin during the fourth quarter of 2025 were driven by the same factors.
Speaker Change: Commercial excavation is one of the most price sensitive aspects of our business.
Michael Witzeman: Overall, commercial business is generally performed at a slightly lower margin than residential business.
As they are some of our largest jobs frequent frequently exceeding $50000 per job.
Speaker Change: Overall commercial businesses generally performed at a slightly lower margin than residential business.
Michael Witzeman: Additionally... Road Ridder Management received feedback from our commercial sales force that we could potentially drive additional excavation work if we priced that work less aggressively. Commercial excavation is one of the most price-sensitive aspects of our business. as they are some of our largest jobs, frequently exceeding $50,000 per job. Due to the size of the job, it is more likely that a commercial customer will get quotes from multiple vendors. In the first quarter, Rotor Rooter Management reduced the price structure for selected large commercial excavation jobs. This is a key factor that led to the 38% increase in commercial excavation revenue.
Speaker Change: Due to the size of the job it is more likely that a commercial customer will get quotes from multiple vendors.
Speaker Change: Additionally.
Speaker Change: What are their management received feedback from our commercial sales force that we could potentially drive additional excavation work, if we price to that work less aggressively.
Speaker Change: In the first quarter Roto Rooter management reduced the price structure for selected large commercial excavation jobs.
Speaker Change: Commercial excavation is one of the most price sensitive aspects of our business as they are some of our largest jobs frequent frequently exceeding $50000 per job.
Speaker Change: This is a key factor that led to the 38% increase in commercial excavation revenue.
Speaker Change: Over due to the reduced pricing those jobs were done at a slightly lower margin than our other business.
Speaker Change: Due to the size of the job it is more likely that a commercial customer will get quotes from multiple vendors.
Speaker Change: Roto Rooter management intends to refine its excavation pricing model during the second quarter until the balance between revenue growth and EBITDA margin is achieved.
Speaker Change: In the first quarter Roto Rooter management reduced the price structure for selected large commercial excavation jobs.
Speaker Change: The financial results in the first quarter of 2025 are well within our expectations and related guidance for both VITAS and Roto Rooter.
Speaker Change: This is a key factor that led to the 38% increase in commercial excavation revenue. However, due to the reduced pricing those jobs were done at a slightly lower margin than our other business.
Michael Witzeman: However, due to the reduced pricing, those jobs were done at a slightly lower margin than our other businesses. Roto-Rooter Management intends to refine its excavation pricing model during the second quarter until a balance between revenue growth and EBITDA margin is achieved.
Speaker Change: We anticipate providing updated earnings guidance is a part of the June 32025 earnings press release.
Speaker Change: Roto Rooter management intends to refine its excavation pricing model during the second quarter until a balance between revenue growth and EBITDA margin is achieved.
Nick: I will now turn this call over to Nick.
Nick: Thanks, Mike.
Nick: I am pleased with our start to 2025, which is in line with our guidance and on the heels of the strong operating performance over the past few years.
Michael Witzeman: The financial results in the first quarter of 2025 are well within our expectations and related guidance for both VITAS and Rotary. We anticipate providing updated earnings guidance as a part of the June 30th, 2025 earnings press release.
Speaker Change: The financial results in the first quarter of 2025 are well within our expectations and related guidance for both VITAS and Roto Rooter.
Nick: In the first quarter of 2025, our average daily census was 22244 patients an.
Speaker Change: We anticipate providing updated earnings guidance is a part of the June 32025 earnings press release.
Nick: An increase of 13, 1% when compared to the prior year period, VITAS generated quarterly sequential ADC growth over the last 10 quarters.
Nicholas Westfall: I will now turn this call over to Nick. Thanks, Mike. I'm pleased with our start to 2025, which is in line with our guidance and on the heels of the strong operating performance of the past few years. In the first quarter of 2025, our average daily census was 22,244 patients. an increase of 13.1% when compared to the prior year period. VITAS has generated quarterly sequential ADC growth over the last 10 quarters. In the first quarter of 2025, total VITAS emissions were 18,139. This is a 7.3% increase when compared to the first quarter of 2024. In the quarter, admissions increased in all four of our pre-admit location types.
Nick: I will now turn this call over to Nick.
Nick: Thanks, Mike.
Nick: I'm pleased with our start to 2025, which is in line with our guidance and on the heels of a strong operating performance over the past few years.
Nick: In the first quarter of 2025 total VITAS admissions were 18139. This is a seven 3% increase when compared to the first quarter of 2024.
Nick: In the first quarter of 2025 of our average daily census was 22244 patients.
Nick: In the quarter admissions increased in all four of our pre admit location types, our nursing home admissions increased three 9% hospital directed admissions increased 12%.
Nick: An increase of 13, 1%.
Nick: When compared to the prior year period, VITAS generated quarterly sequential ADC growth over the last 10 quarters.
Nick: In the first quarter of 2025 total VITAS admissions were 18139. This is a seven.
Nick: Home based patient admissions expanded four 2% in the assisted living facilities admissions increased five 2% when compared to the prior year period.
Nick: Seven 3% increase when compared to the first quarter of 2024.
Nick: Our average length of stay in the quarter was $118 seven days. This compares to 103 nine days in the first quarter of 2024. It is important to remember that length of stay statistics for the industry are calculated based on discharge patients non active patients.
Nick: In the quarter admissions increased in all four of our pre admit location types, our nursing home admissions increased three 9% hospital directed admissions increased 12%.
Nicholas Westfall: Our nursing home admissions increased 3.9 percent, hospital directed admissions increased 12 percent, home-based patient admissions expanded 4.2 percent, and the assisted living facilities admissions increased 5.2 percent when compared to the prior year period. Our average length of stay in the quarter was 118.7 days. This compares to 103.9 days in the first quarter of 2024. It's important to remember that length of stay statistics for the industry are calculated based on discharged patients, not active patients. The increase in average length of stay between quarters represents the effect of the patients admitted during our community access initiative, which was designed to identify appropriate patients earlier in their disease trajectory being discharged.
Nick: Home based patient admissions expanded four 2% in the assisted living facilities admissions increased five 2% when compared to the prior year period.
Nick: The increase in average length of stay between quarters represents the effect of the patients admitted during our community access initiative, which was designed to identify appropriate patients earlier in their disease trajectory being discharged.
Nick: Our average length of stay in the quarter was $118 seven days. This compares to 103 nine days in the first quarter of 2024, it's important to remember that length of stay statistics for the industry are calculated based on discharge patients non active patients the increase in average length of stay between quarters reps.
Nick: I believe we continue to successfully manage our exposure to Medicare cap in 2025, our median length of stay was 16 days in the first quarter of both 2025 and 2024.
Nick: Additionally, our medium length of stay in the quarter decreased sequentially from 16 days from 18 days in the fourth quarter of 2024, which illustrates the intended impact of increased hospital admissions.
Nick: Resent the effect of the patients admitted during our community access initiative, which was designed to identify appropriate patients earlier in their disease trajectory being discharged.
Nicholas Westfall: I believe we continue to successfully manage our exposure to Medicare cap in 2025. Our median length of stay was 16 days in the first quarter of both 2025 and 2024. Additionally, our median length of stay in the quarter decreased sequentially from 16 days from 18 days in the fourth quarter of 2024, which illustrates the intended impact of increased hospital admissions. As Kevin mentioned, the primary Medicare cap management strategy is to increase hospital-based admissions in select locations. Hospital referrals traditionally come later in a patient's disease trajectory and therefore result in shorter lengths of stay. This has the overall effect of moderating both revenue growth and margin growth but also provides additional cap cushion in those key locations.
Nick: I believe we continue to successfully manage our exposure to Medicare cap in 2025, our median length of stay was 16 days in the first quarter of both 2025 and 2024. Additionally.
Nick: As Kevin mentioned, the primary Medicare cap management strategy is to increase hospital based submissions in select locations Hot.
Speaker Change: Hospital referrals traditionally come later on a patient's disease trajectory and therefore result in shorter lengths of stay. This is the overall effect of moderating both revenue growth and margin growth, but also provides additional cap cushion in those key locations.
Nick: Additionally, our medium length of stay in the quarter decreased sequentially from 16 days from 18 days in the fourth quarter of 2024, which illustrates the intended impact of increased hospital admissions.
Speaker Change: In the first quarter of 2025 hospital based admissions represented 49% of our overall admissions, which is our highest level since the pandemic.
Nick: Kevin mentioned the primary Medicare cap management strategy is to increase hospital based submissions in select locations.
Nick: Hospital referrals traditionally come later in a patient's disease trajectory and therefore result in shorter lengths of stay. This is the overall effect of moderating both revenue growth and margin growth, but also provides additional cap cushion in those key locations.
Speaker Change: Hospital based admissions increased 12% compared to the first quarter of 2024 with the current Medicare cap rules. This is the right thing to do for the company to ensure long term sustainable growth.
Nicholas Westfall: In the first quarter of 2025, hospital-based admissions represented 49% of our overall admissions, which is our highest level since the pandemic. Hospital-based admissions increased 12% compared to the first quarter of 2024. With the current Medicare cap rules, this is the right thing to do for the company to ensure long-term sustainable growth. As Kevin also mentioned, we're excited to be providing services in Pasco County and soon in Marion County, Florida. We believe our entry into these two territories is a win both for the people we will serve and for the future growth potential of ETAS. These new locations also provide Medicare cap cushion in the near term.
Speaker Change: As Kevin also mentioned, we're excited to be providing services in Pasco County, and soon in Marion County, Florida.
Nick: In the first quarter of 2025 hospital based admissions represented 49% of our overall admissions, which is our highest level since the pandemic.
Speaker Change: We believe our entry into these two territories is a win both for the people, we will serve and for the future growth potential of VITAS. These new locations also provide Medicare cap cushion in the near term.
Nick: Hospital based admissions increased 12% compared to the first quarter of 2024.
But the current Medicare cap rules. This is the right thing to do for the company to ensure long term sustainable growth.
Speaker Change: To quickly recap what our team has accomplished we've now generated 11 quarters of sequential net growth in licensed health care workers and 10 quarters of sequential growth in ADC.
Kevin Mcnamara: As Kevin also mentioned, we're excited to be providing services in Pasco County, and soon in Marion County, Florida.
Kevin Mcnamara: We believe our entry into these two territories is a win both for the people, we will serve and for the future growth potential of VITAS. These new locations also provide Medicare cap cushion in the near term.
Speaker Change: Last year, we demonstrated the ability to partner with and successfully integrate other providers through acquisitions to ensure communities continue to receive the best possible care.
Speaker Change: As a result of these efforts VITAS continues to achieve higher than historical averages and ADC growth revenue growth EBITDA growth and EBITDA margin.
Nicholas Westfall: To quickly recap what our team has accomplished, we've now generated 11 quarters of sequential net growth in licensed healthcare workers and 10 quarters of sequential growth in ADC. Last year we demonstrated the ability to partner with and successfully integrate other providers through acquisitions to ensure communities continue to receive the best possible care. As a result of these efforts, PTAS continues to achieve higher-than-historical averages in ADC growth, revenue growth, EBITDA growth, and EBITDA margins. We are optimistic about the ability for VITAS to maintain above-average growth, both organically and through creative acquisitions in 2025 and beyond.
Kevin Mcnamara: To quickly recap what our team has accomplished we've now generated 11 quarters of sequential net growth in licensed health care workers and 10 quarters of sequential growth in ADC.
Kevin Mcnamara: We are optimistic about the ability for VITAS to maintain above average growth both organically and through accretive acquisitions in 2025 and beyond with that I'd like to turn the call back over to Kevin.
Kevin Mcnamara: Last year, we demonstrated the ability to partner with and successfully integrate other providers through acquisitions to ensure communities continue to receive the best possible care.
Kevin Mcnamara: Thank you Nick I will now open this teleconference to questions.
Kevin Mcnamara: As a result of these efforts VITAS continues to achieve higher than historical averages and ADC growth revenue growth EBITDA growth and EBITDA margin.
Kevin Mcnamara: As a reminder, if you'd like to ask a question at this time. Please press star one on your telephone and wait for your name to be announced.
Kevin Mcnamara: We are optimistic about the ability for VITAS to maintain above average growth both organically and through accretive acquisitions in 2025 and beyond with that I'd like to turn the call back over to Kevin.
Kevin Mcnamara: To withdraw your question. Please press star one again please.
Kevin Mcnamara: Please standby, while we compile the Q&A roster.
Kevin Mcnamara: With that, I'd like to turn the call back over to Kevin. Thank you, Nick.
Operator: I will now open this teleconference to questions. As a reminder, if you'd like to ask a question at this time, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile.
Kevin Mcnamara: Thank you Nick I will now open this teleconference to questions.
Ben Hendrix: Our first question comes from Ben Hendrix, with RBC capital markets.
Kevin Mcnamara: As a reminder, if you'd like to ask a question at this time. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again please.
Speaker Change: Okay. Thank you very much just wanted to ask a little bit more go into little more detail about the longer term cap management strategy I know that you have right.
Ben Hendrix: Rate updates that are wage index the cap is not.
Kevin Mcnamara: Please standby, while we compile the Q&A roster.
Ben Hendrix: And it makes sense that youre focusing selectively on the shorter stay patients, but just wondering how that plays out over time and how we would expect that to evolve as we kind of go in through different rate setting cycles, and how that resets every year and if this is something thats just going to continue to accelerate and that we're going to see continued cap <unk>.
Benjamin Hendrix: Our first question comes from Ben Hendricks with RBC. Hey, thank you very much. I just wanted to ask a little bit more, go into a little more detail about the longer term cap management strategy. I know that, you know, you have rate, rate updates that are at wage index, the cap is not, and makes sense that you're focusing selectively on the shorter stay patients. But just wondering how that plays out over time, and how we would expect that to evolve as we kind of go in through different rate setting cycles, and how that resets every year.
Speaker Change: Our first question comes from Ben Hendrix, with RBC capital markets.
Kevin Mcnamara: Okay. Thank you very much.
Speaker Change: To ask a little bit more I go into a little more detail about the longer term cap management strategy I know that you have right.
Speaker Change: Rate updates that are wage index the catheter not.
Ben Hendrix: Sure for the intermediate term or if we're going to see a reset in the near term. Thanks.
Speaker Change: And it makes sense that you're focusing selectively on the shorter stay patients, but just wondering how that plays out over time and how we would expect that to evolve as we kind of go in through different rate setting cycles, and how that reset every year and if this is something thats just going to continue to accelerate and that we're going to see continued cap <unk>.
Speaker Change: I'm going to have Nick answers question, but let me just start by giving you a very generally I mean, ideally you would like cap cushion to be zero you wanted to take advantage of all the opportunities available by your level of add minutes.
Benjamin Hendrix: And if this is something that's just going to continue to accelerate, and we're going to see continued cap pressure for the intermediate term, or if we're going to see a reset.
And there.
Ben Hendrix: There are a couple of things.
Speaker Change: Sure for the intermediate term or if we're going to see a reset in the near term. Thanks.
Ben Hendrix: We're going to talk about that.
Ben Hendrix: Keep in mind.
Ben Hendrix: During the pandemic when our staff with short.
Kevin Mcnamara: I'm going to have Nick answer this question, but let me just start by giving you very generally. I mean, ideally, you would like cap cushion to be zero. You want to take advantage of all the opportunities available by your level of admins. And you know, there are a couple of things that we're going to talk about that, keep in mind. During the pandemic, when our staff was short, you know, the Our emphasis from hospital admissions was necessarily changed a little bit just because of the acuity levels that a lot of the hospital-based admissions, the acuity levels that the patients come with.
Speaker Change: I'm going to have Nick answer this question, but let me just start by giving you very generally I mean, ideally you would like cap cushion to be zero you wanted to take advantage of all the opportunities available by your level of add minutes.
Ben Hendrix: Our emphasis from <unk>.
Ben Hendrix: Hospital admissions.
Ben Hendrix: Was this necessarily.
Ben Hendrix: Change it a little bit.
Ben Hendrix: Because of the acuity levels that.
Speaker Change: And there.
Ben Hendrix: A lot of the hospital based admissions.
Speaker Change: There are a couple of things that if you could talk about that.
Speaker Change: In mind.
Ben Hendrix: <unk> levels that the patients come with and it had the effect of increasing our real.
Speaker Change: During the pandemic when our staff with short.
Speaker Change: Yeah.
Speaker Change: Our emphasis from a hospital admissions.
Ben Hendrix: Average length of stay just there was a.
Ben Hendrix: Just out of necessity just based on the staffing levels, we were able to maintain.
Speaker Change: Was this necessarily changed a little bit.
Speaker Change: Just because of the acuity levels that.
Nick: Nick knew that was going to be it was going to cause some.
Speaker Change: A lot of the hospital based admissions.
Nick: Mid course corrections as the.
Speaker Change: Acuity levels that the patients come with and it has the effect of increasing our real.
Kevin Mcnamara: And it had the effect of increasing our real... Average length of stay, just, it was a... It was just out of necessity, just based on the staffing levels we were able to maintain. Nick knew that was going to be, you know, it was going to cause some, you know, mid-course corrections as the, as we The second thing is if you look at the reimbursement that you made reference to for Florida for this year, for this government plan year, in Florida it was a little bit higher than we anticipated. So that's good, that's more profitability, used a little bit more of our cushion.
Speaker Change: As we.
Nick: Expanded into the coming years.
Speaker Change: Our average length of stay just it was a.
Nick: Then of course it has been.
Nick: Doing that okay. The second thing is if you look at the reimbursement.
Speaker Change: It was just out of necessity just based on the staffing levels, we were able to maintain.
Nick: But you've made reference to for Florida for this year for this government plan year in Florida, It was a little bit higher than we anticipated okay. So.
Speaker Change: Nick knew that was going to be you know who's going to cause some.
Speaker Change: Mid course corrections as the.
Nick: That used that's good that's more profitability use a little bit more of a cushion we're talking about it a little bit more but.
Speaker Change: As we are.
Speaker Change: Expanded into the coming years.
Speaker Change: The court has been.
Nick: I'm, just saying very generally speaking.
Speaker Change: Doing that okay. The second thing is if you look at the reimbursement that.
Nick: It's a good thing if you ask me what is.
Nick: It's a good thing to have no cushion at the end of the year, it's a bit of a high wire Act, but.
Speaker Change: You've made reference to for Florida for this year or for this government pioneer in Florida, It was little bit higher than we anticipated okay. So.
Nick: That's how you take best advantage of the opportunity to provide to the business, but Nick luxury talk I just want to give that overview.
Speaker Change: That used that's good that's more profitability use a little bit more of a cushion we're talking about it a little bit more but.
Kevin Mcnamara: We're talking about it a little bit more, but I'm just saying very generally speaking it's a good thing. It's a good thing to have no cushion at the end of the year, it's a bit of a high wire act, but that's how you take best advantage of the opportunities provided to the business.
Nick: And just say.
Nick: We meant to do this.
Speaker Change: I'm, just saying very generally speaking.
Speaker Change: But Nick wants to just talk about kind of programs that as things you are doing and we will be talking about over the next.
Speaker Change: It's a good thing if you ask me what is a.
Speaker Change: It's a good thing to have no cushion at the end of the year, it's a bit of a high wire Act, but.
Speaker Change: Six months to 12 months, yes, I mean, I think the most important piece is.
Speaker Change: That's how you take best advantage of the opportunity to provide to the business, but like why don't you talk I just wanted to give that overview.
Speaker Change: This is all part of normal normal business and has been for the last decade plus of running and operating.
Nicholas Westfall: But Nick, why don't you talk, I just want to give that overview and just say in a sense we meant to do this, but Nick why don't you just talk about the kind of programs, things you are doing and you will be talking about over the next six to twelve months. Yeah, I mean I think Ben the most important piece is that this is all part of normal business and has been for the last decade plus of running and operating. and any hospice provider. So, yeah, from a year-to-year basis with, you know, five, six years ago, a regulatory change that dislocated the annualized rate impact compared to the individual market rate adjustments, you may see an acceleration or a reduction over a 12-year window based on the differential between that national wage rate and the local market components.
Speaker Change: And just say.
Speaker Change: We meant to do this.
Speaker Change: VITAS and any hospice provider, so yes from a year to year basis with five six years ago, a regulatory change at dislocated the annualized rate impact compared to the individual market rate adjustments you may see an acceleration or a reduction over a 12 year.
Speaker Change: But Nick wants to just talk about kind of the programs that as things you are doing and we will be talking about over the next.
Speaker Change: Six to 12 months, Yeah, I mean, I think the most important piece is.
Speaker Change: That this is all part of normal normal business and has been for the last decade plus of.
Speaker Change: <unk> based on the differential between that national wage rate and the local market components, but all it ultimately means at the end of the day is a mature hospice provider thats looking at it evaluating it and monitoring and on a month to month basis.
Speaker Change: Running and operating.
Speaker Change: VITAS and any hospice provider, so yes from a year to year basis with five six years ago, a regulatory change that dislocated the annualized rate impact compared to the individual market rate adjustments you may see an acceleration or a reduction over a 12 year win.
Speaker Change: Has a fiduciary responsibility to manage and think about think out about the future trend. So it's not anything that materially changes anything in the near term or the long term and quite frankly, one of the reasons I think we've been talking about a little bit more over the last six to nine months is answering some of the questions. When we have.
Speaker Change: Based on the differential between that national wage rate and a local market components, but all it ultimately means at the end of the day as you know a mature hospice provider thats looking at it evaluating it and monitoring it on a month to month basis.
Nicholas Westfall: But all it ultimately means at the end of the day is, you know, a mature hospice provider that's looking at it, evaluating it, and monitoring it on a month-to-month basis, you know, has a fiduciary responsibility just to manage and think out about the future trend. So it's not anything that materially changes anything in the near term or the long term. And quite frankly, one of the reasons I think we've been talking about a little bit more over the last six to nine months is answering some of the questions when we have outsized top line and bottom line growth as to why our guidance, which was above historical average, didn't have marginal expansion necessarily inside of it.
Speaker Change: Outside topline and Bottomline growth as to why our guidance, which was above historical average didn't have marginal expansion necessarily inside of it and it really that's that's sort of the underlying factor and so while you have a huge queue of.
Speaker Change: Has a fiduciary responsibility to manage and think about think out about the future trend. So it's not anything that materially changes anything in the near term or the long term and quite frankly, one of the reasons I think we've been talking about a little bit more over the last six to nine months as is answering some of the questions. When we have.
Speaker Change: Active existing patients and constantly and many new patients with a median length of stay at 16 days, there's a long tail to all these things and I think we've just tried to be more proactive.
Speaker Change: Outside topline and Bottomline growth as to why our guidance, which was above historical average didn't have marginal expansion necessarily inside of it and it really.
Speaker Change: Talking about those different factors all of which should have minimal to no P&L impact.
Nicholas Westfall: And it really – that's sort of the underlying factor. And so, you know, while you have a huge queue of – active existing patients and constantly admitting new patients, you know, with a median length of stay of 16 days, there's a long tail to all these things, and I think we've just tried to be more proactive of talking about those different factors, all of which should have, you know, minimal to no P&L impact, you know, in the near term, as you can see from 25 guidance or in the mid and long term. It's just a function of the industry from a rule that got put in place when the benefit was enacted in 1983, when almost every patient was a cancer patient with a very predictable prognostication and outcome.
Speaker Change: That's sort of the underlying factor and so while you have a huge queue of.
Speaker Change: In the near term as you can see from 25 guidance or in the mid and long term. It's just it's a function of the industry from a rule that got put in place when the benefit was enacted in the 1983 when almost every patient with a cancer patient with a very predictable prognostication that outlook.
Speaker Change: Active existing patients and constantly and many new patients with a median length of stay of 16 days, there's a long tail to all of these things and I think we've just tried to be more proactive.
Speaker Change: Talking about those different factors all of which should have minimal to no P&L impact.
Mike Whitman: And then the only thing this is Mike the only thing I would add is.
Kevin Mcnamara: As sort of as Kevin mentioned.
Speaker Change: In the near term as you can see from our 25 guidance or in the mid and long term. It's just it's a function of the industry from a rule that got put in place when the benefit was enacted in the 1983 win.
We knew that the growth path.
Kevin Mcnamara: <unk> three and 'twenty four it looked like it was probably higher than what was sustainable for the midterm and long term only because of the Medicare cap.
Speaker Change: Almost every patient was a cancer patient with a very predictable prognostication outlook.
Kevin Mcnamara: So I think that if youre looking 26 and beyond.
Michael Witzeman: Ben, the only thing, this is Mike, the only thing I would add is, sort of as Kevin mentioned, we knew that the growth path that 23 and 24 looked like was probably higher than what was sustainable for the mid-term and long-term only because of the Medicare cap. So I think that if you're looking, you know, 26 and beyond, the Operating metrics that we're showing in the first quarter and have sort of guided to for twenty-five is probably the more sustainable growth trajectory versus what we saw in twenty-three and twenty-four. Again, only because of the Medicare cap.
Mike: Ben the only thing this is Mike the only thing I would add is.
Kevin Mcnamara: The.
Kevin Mcnamara: Operating metrics that we're showing in the first quarter and I've sort of guided to for 25 years is probably the more sustainable growth trajectory versus what we saw in 'twenty three 'twenty four again, only because of the Medicare cap.
Kevin Mcnamara: As sort of as Kevin mentioned.
Speaker Change: We knew that the growth path that 23% and 24 it looked like it was probably higher than where it was sustainable for the midterm and long term only because of the Medicare cap.
Speaker Change: Great that makes perfect sense. Thank you for that for that color and I guess, Mike Dean with you for a second just wanted Derrick we can get a little bit more color any details you can offer on cash flow dynamics, particularly on working capital looks like.
Kevin Mcnamara: So I think that if you are looking you know 26 and beyond.
Speaker Change: The.
Speaker Change: Operating metrics that we're showing in the first quarter and I've sort of guided to for 25 years is probably the more sustainable growth trajectory versus what we saw in 2024 again only because of the Medicare cap.
Speaker Change: I just wanted to get your thoughts there. Thanks.
Speaker Change: Sure there is two things that really affected.
Benjamin Hendrix: Great. That makes perfect sense. Thank you for that color.
Speaker Change: Cash flow of working capital at the end of the first quarter 'twenty. Five first one is Nick can talk in great deal detail about it if you want but we disclosed in the past we had.
Speaker Change: Great that makes perfect sense. Thank you for that for that color and I guess, Mike staying with you for a second just wondering Derrick we could get a little bit more color or any details you can offer on cash flow dynamics, particularly our working capital looks like.
Michael Witzeman: And I guess, Mike, staying with you for a second, I just wondered, Derek, if we could get a little bit more color, any details you can offer on cash flow dynamics, particularly working capitals, like we had a step up in AR. I just wanted to get your thoughts there. Thanks. Sure, there's two things that really affected, you know, cash flow of working capital at the end of the first quarter, 25. First one is, and Nick can talk in great detail about it if you want, but we disclosed in the past. We had a... Strange Case with the OAS, where they did an audit of a very select few patients, extrapolated it across some crazy three-year window and said that we needed to refund $48 million.
Speaker Change: Strange case with the OAS where they.
Speaker Change: Yes did an audit of a very select few patients extrapolated across some crazy.
Speaker Change: I just wanted to get your thoughts there. Thanks.
Speaker Change: Sure.
Speaker Change: Two things that really affected.
Speaker Change: Three year window, and said that we needed to refund $48 million.
Speaker Change: Cash flow and working capital at the end of the first quarter 'twenty five first one is a Nick can talk in great deal detail about it if you want but we disclosed in the past we had a.
Speaker Change: We had refunded the $48 million I think two years ago we.
Speaker Change: We found out at the in the first quarter. This year, we were getting it all back.
Speaker Change: Strange case with the OAS, where they are.
Speaker Change: Yes, except for.
Speaker Change: And did an audit of a very select few patients extrapolated across some crazy.
Speaker Change: For $8 that we had to pay but otherwise we're getting it all back.
Speaker Change: Over the last two years that $48 million has been sitting as a long term receivable.
Speaker Change: Three year window, and said that we needed to refund $48 million.
Michael Witzeman: We had refunded the $48 million, I think, two years ago. We found out in the first quarter of this year, we were getting it all back. Plus, except for $8. Yes, except for $8 that we had to pay. But otherwise, we were getting it all back. So over the last two years, that $48 million has been sitting as a long-term receivable because we actually got the cash back, I believe, on April 1st. It got moved to a short-term receivable in the first quarter. And so receivables are $48 million higher because of that. The other thing is always that affects our cash flow is the timing of the PIP.
Speaker Change: We actually got the cash back I believe on April one.
Speaker Change: We had refunded the $48 million I think two years ago.
Speaker Change: Got moved to a short term receivable in the first quarter and so receivables are $48 million higher because of that the other thing is always that affects our cash flow is the timing of the Pip and so we got a pip.
Speaker Change: We found out at the in the first quarter. This year, we were getting it all back.
Speaker Change: It's a big dollars, yes, except for $8 that we had to pay but otherwise we're getting it all back so over the last two years that $48 million has been sitting as a long term receivable because we actually got the cash back I believe on April one it got moved to a short term receivable in the first.
Speaker Change: Three days into the quarter this year.
Speaker Change: The second quarter, so the Pip payment that we got it.
Speaker Change: End of the first quarter and 24 didn't come to the beginning of the second quarter and 25% and that's that's $57 million and so those are the two things that are affecting both the receivable balance as well as the cash flow during the quarter, but we have the cash that we have the cash now and neither of those are.
Speaker Change: <unk> and so receivables are $48 million higher because of that the other thing is always that affects our cash flow is the timing of the Pip and so we got a pip.
Michael Witzeman: And so we got a PIP three days into the quarter this year, or into the second quarter. So the PIP payment that we got at the end of the first quarter in 24 didn't come to the beginning of the second quarter in 25. And that's $57 million. And so those are the two things that are affecting both the receivable balance as well as the cash flow during the quarter. But we have the cash now. We have the cash now. And neither of those are any indication of cash flow collection problems or anything like that. It's just timing.
Speaker Change: Three days into the quarter this year into the second quarter.
Speaker Change: Any indication of cash flow collection problems or anything like that is just timing.
Speaker Change: The Pip payment that we got at the end of the first quarter and 24 didn't come to the beginning of the second quarter in 'twenty five and that's a that's $57 million and so those are the two things that are affecting both the receivable balance as well as the cash flow during the quarter, but we have the cash that we have the cash now and neither of those.
Speaker Change: Great. Thank you very much guys.
Speaker Change: Our next question comes from Rakesh with Bloomberg.
Speaker Change: Those are <unk>.
Speaker Change: Okay.
Speaker Change: Any indication of cash flow collection problems or anything like that is just timing.
Speaker Change: Bloomberg Your line may be on mute.
Michael Witzeman: Great, thank you very much guys.
Speaker Change: Great. Thank you very much guys.
Operator: Our next question comes from R. Prakash with Bloomberg. Bloomberg, your line may be on.
Speaker Change: I'm showing no further questions in queue at this time I'd like to turn the call back to Kevin Mcnamara for closing remarks.
Rakesh: Our next question comes from Rakesh with Bloomberg.
Kevin Mcnamara: Thank you.
Kevin Mcnamara: Thank you for your attention I thought.
Speaker Change: Okay.
Speaker Change: I want to congratulate both our operating units for Ixia.
Speaker Change: Bloomberg Your line may be on mute.
Kevin Mcnamara: Exceeding our.
Speaker Change: Internal projection from which we.
Speaker Change: Provided guidance.
Operator: I'm showing no further questions in queue at this time.
Speaker Change: We maintain that guidance and.
Speaker Change: I'm showing no further questions in queue at this time I'd like to turn the call back to Kevin Mcnamara for closing remarks.
Kevin Mcnamara: I'd like to turn the call back to Kevin McNamara. Thank you. Thank you for your attention.
Speaker Change: Again looking at the stock price it seems to be sort of a dislocation in the market for our stock for some reason, but in any event I want to thank everyone for their attention and we will.
Kevin Mcnamara: Thank you.
Kevin Mcnamara: I thought I want to congratulate both our operating units for exceeding our... internal projections from which we provided guidance, we maintained that guidance.
Speaker Change: Thank you for your attention.
Speaker Change: Got it.
Speaker Change: I want to congratulate both our operating units for <unk>.
Speaker Change: Renew these discussions.
Speaker Change: Exceeding our.
Speaker Change: Three months, hence thank you.
Speaker Change: Internal projections from which we.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Provided guidance.
Speaker Change: We maintain that guidance and.
Kevin Mcnamara: Again, looking at the stock price, it seems to be a bit of a dislocation in the market for our stock for some reason, but in any event, I want to thank everyone for their attention and we'll renew these discussions three months hence.
Speaker Change: Again looking at the stock price it seems to be bit of a dislocation in the market for our stock for some reason, but in any event I want to thank everyone for their attention and well.
Speaker Change: Renew these discussions.
Speaker Change: Three months, hence thank you.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Yes.