UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended September 30, 2026

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 1-8351

CHEMED CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		31-0791746
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
255 E. Fifth Street, Suite 2600, Cincinnati, Ohio		45202
(Address of principal executive offices)		(Zip code)
(513) 762-6690 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes	x	No	o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes	x	No	o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Large Accelerated Filer

Accelerated Filer

Non-accelerated Filer

Smaller Reporting Company

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes	o	No	x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered	Amount	Date

Capital Stock $1 Par Value	CHE	New York Stock Exchange	13,014,915 Shares	September 30, 2026

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CHEMED CORPORATION AND

SUBSIDIARY COMPANIES

Index



	Page No.
PART I. FINANCIAL INFORMATION:

Item 1. Financial Statements
Unaudited Consolidated Balance Sheets -
September 30, 2026 and December 31, 2025	3

Unaudited Consolidated Statements of Income -
Three months and nine months ended September 30, 2026 and 2025	4

Unaudited Consolidated Statements of Cash Flows -
Nine months ended September 30, 2026 and 2025	5

Unaudited Consolidated Statements of Changes in Stockholders’ Equity-
Three months and nine months ended September 30, 2026 and 2025	6

Notes to Unaudited Consolidated Financial Statements	8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	26

Item 3. Quantitative and Qualitative Disclosures about Market Risk	43

Item 4. Controls and Procedures	43

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	43

Item 1A. Risk Factors	43

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3. Defaults Upon Senior Securities	44

Item 4. Mine Safety Disclosures	44

Item 5. Other Information	44

Item 6. Exhibits	45
EX – 10.1
EX – 31.1
EX – 31.2
EX – 32.1
EX – 32.2
EX – 101
EX – 104

SIGNATURES	46

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)



	September 30, 2026		December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	48,427	$	74,515
Accounts receivable less allowances		254,861		182,575
Inventories		7,748		7,543
Prepaid income taxes		16,346		11,165
Prepaid expenses		38,346		26,818
Total current assets		365,728		302,616
Investments of deferred compensation plans held in trust		144,845		140,347
Properties and equipment, at cost, less accumulated depreciation of $408,486 (2025- $388,104)		216,961		205,662
Lease right of use asset		144,029		131,151
Identifiable intangible assets less accumulated amortization of $77,694 (2025 - $69,432)		78,791		82,764
Goodwill		754,758		666,999
Other assets		13,327		8,650
Total Assets	$	1,718,439	$	1,538,189

LIABILITIES
Current liabilities
Accounts payable	$	65,297	$	64,459
Accrued insurance		77,044		62,054
Accrued compensation		89,044		58,329
Short-term lease liability		41,209		40,892
Income taxes		-		2,504
Other current liabilities		58,340		58,892
Total current liabilities		330,934		287,130
Deferred compensation liabilities		142,421		136,139
Long-term debt		236,000		-
Long-term lease liability		114,985		102,867
Deferred income taxes		18,855		19,313
Other liabilities		13,823		13,335
Total Liabilities		857,018		558,784
Commitments and contingencies (Note 11)
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 37,762,302 shares (2025 - 37,594,676 shares)		37,762		37,595
Paid-in capital		1,693,508		1,592,197
Retained earnings		3,135,794		2,955,375
Treasury stock - 24,802,346 shares (2025 - 23,884,187 shares)		(4,008,128)		(3,608,117)
Deferred compensation payable in Company stock		2,485		2,355
Total Stockholders' Equity		861,421		979,405
Total Liabilities and Stockholders' Equity	$	1,718,439	$	1,538,189

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)



	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Service revenues and sales	$	690,940	$	624,900	$	2,021,704	$	1,890,641
Cost of services provided and goods sold (excluding depreciation)		457,978		425,143		1,351,507		1,289,778
Selling, general and administrative expenses		111,469		105,775		340,993		311,685
Depreciation		14,427		13,664		42,997		40,798
Amortization		2,974		2,570		8,263		7,713
Other operating expense		7,670		2,998		7,740		3,075
Total costs and expenses		594,518		550,150		1,751,500		1,653,049
Income from operations		96,422		74,750		270,204		237,592
Interest expense		(2,097)		(457)		(4,398)		(1,229)
Other income - net		2,383		9,251		11,071		13,970
Income before income taxes		96,708		83,544		276,877		250,333
Income taxes		(25,060)		(19,307)		(71,224)		(61,846)
Net income	$	71,648	$	64,237	$	205,653	$	188,487

Earnings Per Share:
Net income	$	5.49	$	4.46	$	15.46	$	12.97
Average number of shares outstanding		13,058		14,394		13,300		14,535

Diluted Earnings Per Share:
Net income	$	5.45	$	4.46	$	15.43	$	12.89
Average number of shares outstanding		13,135		14,409		13,329		14,620

Cash Dividends Per Share	$	0.70	$	0.60	$	1.90	$	1.60

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Nine Months Ended September 30,
	2026		2025
Cash Flows from Operating Activities
Net income	$	205,653	$	188,487
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		51,260		48,511
Stock option expense		24,285		24,374
Noncash long-term incentive compensation		6,784		3,057
Litigation settlements		6,000		1,850
Noncash directors' compensation		1,191		1,123
Benefit for deferred income taxes		(456)		(16,259)
Amortization of debt issuance costs		255		241
Changes in operating assets and liabilities:
Increase in accounts receivable		(71,304)		(44,403)
Increase in inventories		(205)		(45)
Increase in prepaid expenses		(11,528)		(8,603)
Increase in accounts payable and other current liabilities		27,783		10,102
Change in current income taxes		(7,685)		(2,162)
Net change in lease assets and liabilities		(667)		(576)
(Increase)/decrease in other assets		(9,356)		42,048
Increase in other liabilities		6,772		6,355
Other sources		840		639
Net cash provided by operating activities		229,622		254,739
Cash Flows from Investing Activities
Business combinations, net of cash acquired		(96,050)		(225)
Capital expenditures		(51,355)		(46,447)
Proceeds from sale of fixed assets		488		3,751
Other uses		(502)		(468)
Net cash used by investing activities		(147,419)		(43,389)
Cash Flows from Financing Activities
Proceeds from revolving line of credit		843,280		-
Payments on revolving line of credit		(607,280)		-
Purchases of treasury stock		(350,042)		(256,944)
Proceeds from exercise of stock options		30,281		27,152
Dividends paid		(25,234)		(23,196)
Change in cash overdrafts payable		6,818		610
Capital stock surrendered to pay taxes on stock-based compensation		(3,832)		(8,484)
Debt issuance costs		(1,349)		-
Other (uses)/sources		(933)		914
Net cash used by financing activities		(108,291)		(259,948)
Decrease in Cash and Cash Equivalents		(26,088)		(48,598)
Cash and cash equivalents at beginning of period		74,515		178,350
Cash and cash equivalents at end of period	$	48,427	$	129,752

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except per share data)

For the three months ended September 30, 2026 and 2025:										Deferred
										Compensation
								Treasury		Payable in
		Capital		Paid-in		Retained		Stock-		Company
		Stock		Capital		Earnings		at Cost		Stock		Total
Balance at June 30, 2026	$	37,613	$	1,617,125	$	3,073,331	$	(3,900,000)	$	2,441	$	830,510
Net income		-		-		71,648		-		-		71,648
Dividends paid ($0.70 per share)		-		-		(9,185)		-		-		(9,185)
Stock awards and exercise of stock options		149		76,372		-		(42,188)		-		34,333
Purchases of treasury stock		-		-		-		(66,031)		-		(66,031)
Excise tax on share repurchase		-		-		-		135		-		135
Other		-		11		-		(44)		44		11
Balance at September 30, 2026	$	37,762	$	1,693,508	$	3,135,794	$	(4,008,128)	$	2,485	$	861,421
										Deferred
										Compensation
								Treasury		Payable in
		Capital		Paid-in		Retained		Stock-		Company
		Stock		Capital		Earnings		at Cost		Stock		Total
Balance at June 30, 2025	$	37,593	$	1,576,165	$	2,831,540	$	(3,249,115)	$	2,302	$	1,198,485
Net income		-		-		64,237		-		-		64,237
Dividends paid ($0.60 per share)		-		-		(8,654)		-		-		(8,654)
Stock awards and exercise of stock options		-		5,101		-		-		-		5,101
Purchases of treasury stock		-		-		-		(180,776)		-		(180,776)
Excise tax on share repurchase		-		-		-		(1,544)		-		(1,544)
Other		-		(199)		-		(40)		73		(166)
Balance at September 30, 2025	$	37,593	$	1,581,067	$	2,887,123	$	(3,431,475)	$	2,375	$	1,076,683

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands, except per share data)
For the nine months ended September 30, 2026 and 2025:										Deferred
										Compensation
								Treasury		Payable in
		Capital		Paid-in		Retained		Stock-		Company
		Stock		Capital		Earnings		at Cost		Stock		Total
Balance at December 31, 2025	$	37,595	$	1,592,197	$	2,955,375	$	(3,608,117)	$	2,355	$	979,405
Net income		-		-		205,653		-		-		205,653
Dividends paid ($1.90 per share)		-		-		(25,234)		-		-		(25,234)
Stock awards and exercise of stock options		167		102,211		-		(43,670)		-		58,708
Purchases of treasury stock		-		-		-		(353,552)		-		(353,552)
Excise tax on share repurchase		-		-		-		(2,657)		-		(2,657)
Other		-		(900)		-		(132)		130		(902)
Balance at September 30, 2026	$	37,762	$	1,693,508	$	3,135,794	$	(4,008,128)	$	2,485	$	861,421
										Deferred
										Compensation
								Treasury		Payable in
		Capital		Paid-in		Retained		Stock-		Company
		Stock		Capital		Earnings		at Cost		Stock		Total
Balance at December 31, 2024	$	37,422	$	1,484,176	$	2,721,832	$	(3,126,660)	$	2,223	$	1,118,993
Net income		-		-		188,487		-		-		188,487
Dividends paid ($1.60 per share)		-		-		(23,196)		-		-		(23,196)
Stock awards and exercise of stock options		171		95,976		-		(49,675)		-		46,472
Purchases of treasury stock		-		-		-		(253,477)		-		(253,477)
Excise tax on share repurchase		-		-		-		(1,544)		-		(1,544)
Other		-		915		-		(119)		152		948
Balance at September 30, 2025	$	37,593	$	1,581,067	$	2,887,123	$	(3,431,475)	$	2,375	$	1,076,683

See Accompanying Notes to Unaudited Consolidated Financial Statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES

Notes to Unaudited Consolidated Financial Statements

1. Basis of Presentation

As used herein, the terms “We,” “Company” and “Chemed” refer to Chemed Corporation or Chemed Corporation and its consolidated subsidiaries.

We have prepared the accompanying unaudited consolidated financial statements of Chemed in accordance with Rule 10-01 of SEC Regulation S-X. Consequently, we have omitted certain disclosures required under generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. The December 31, 2025 balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP. However, in our opinion, the financial statements presented herein contain all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position, results of operations and cash flows. The results of operations for the nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or any other future period, and we make no representations related thereto. These financial statements are prepared on the same basis as and should be read in conjunction with the audited Consolidated Financial Statements and related Notes included in our Annual Report on Form 10-K for the year ended December 31, 2025.

INCOME TAXES

Our effective tax rate reconciliation for the third quarter is as follows (in thousands):


	Three months ended September 30,
	2026			2025

Income tax provision calculated at the statutory federal rate	$	20,308		$	17,544
State and local income taxes, less federal income tax effect		2,685			3,120
Nondeductible expenses:
Stock compensation tax expense		521			-
Other--net		1,546			(1,357)
Income tax provision	$	25,060		$	19,307
Effective tax rate		25.9	%		23.1	%

Our effective income tax rate was 25.9% in the third quarter of 2026 compared to 23.1% during the third quarter of 2025.

Our effective tax rate reconciliation for the first nine months is as follows (in thousands):


	Nine months ended September 30,
	2026			2025

Income tax provision calculated at the statutory federal rate	$	58,144		$	52,570
State and local income taxes, less federal income tax effect		8,213			9,568
Nondeductible expenses:
Stock compensation tax expense/(benefit)		1,022			(513)
Other--net		3,845			221
Income tax provision	$	71,224		$	61,846
Effective tax rate		25.7	%		24.7	%

Our effective income tax rate was 25.7% in the first nine months of 2026 compared to 24.7% during the first nine months of 2025.

NON-CASH TRANSACTIONS

Included in the accompanying Consolidated Balance Sheets are $1.2 million and $2.1 million of capitalized property and equipment which were not paid for as of September 30, 2026 and December 31, 2025, respectively. Accrued property and equipment purchases have been excluded from capital expenditures in the accompanying Consolidated Statements of Cash Flows. There are no material non-cash amounts included in interest expense for any period presented.

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BUSINESS COMBINATIONS

We account for acquired businesses using the acquisition method of accounting. All assets acquired and liabilities assumed are recorded at their respective fair values at the date of acquisition. The determination of fair value involves estimates and the use of valuation techniques when market value is not readily available. We use various techniques to determine fair value in accordance with accepted valuation models, primarily the income approach. The significant assumptions used in developing fair values include, but are not limited to, revenue growth rates, the amount and timing of future cash flows, discount rates, useful lives, royalty rates and future tax rates. The excess of purchase price over the fair value of assets and liabilities acquired is recorded as goodwill. See Note 16 for discussion of recent acquisitions.

ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying Notes. Actual results could differ from those estimates. Disclosures of after-tax expenses and adjustments are based on estimates of the effective income tax rates for the applicable segments.

2. Revenue Recognition

In May 2014, the FASB issued Accounting Standards Update “ASU No. 2014-09 – Revenue from Contracts with Customers.” The standard and subsequent amendments are intended to develop a common revenue standard for removing inconsistencies and weaknesses, improve comparability, provide for more useful information to users through improved disclosure requirements and simplify the preparation of financial statements. The standard is also referred to as Accounting Standards Codification No. 606 (“ASC 606”).

VITAS

Service revenue for VITAS is reported at the amount that reflects the ultimate consideration we expect to receive in exchange for providing patient care. These amounts are due from third-party payors, primarily commercial health insurers and government programs (Medicare and Medicaid), and include variable consideration for revenue adjustments due to settlements of audits and reviews, as well as certain hospice-specific revenue capitations. Amounts are generally billed monthly or subsequent to patient discharge. Subsequent changes in the transaction price initially recognized are not significant.

Hospice services are provided on a daily basis and the type of service provided is determined based on a physician’s determination of each patient’s specific needs on that given day. Reimbursement rates for hospice services are on a per diem basis regardless of the type of service provided or the payor. Reimbursement rates from government programs are established by the appropriate governmental agency and are standard across all hospice providers. Reimbursement rates from health insurers are negotiated with each payor and generally structured to closely mirror the Medicare reimbursement model. The types of hospice services provided and associated reimbursement model for each are as follows:

Routine Home Care occurs when a patient receives hospice care in their home, including a nursing home setting. The routine home care rate is paid for each day that a patient is in a hospice program and is not receiving one of the other categories of hospice care. For Medicare patients, the routine home care rate reflects a two-tiered rate, with a higher rate for the first 60 days of a hospice patient’s care and a lower rate for days 61 and after. In addition, there is a Service Intensity Add-on payment which covers direct home care visits conducted by a registered nurse or social worker in the last seven days of a hospice patient’s life, reimbursed up to 4 hours per day in 15 minute increments at the continuous home care rate.

General Inpatient Care occurs when a patient requires services in a controlled setting for a short period of time for pain control or symptom management which cannot be managed in other settings. General inpatient care services must be provided in a Medicare or Medicaid certified hospital or long-term care facility or at a freestanding inpatient hospice facility with the required registered nurse staffing.

Continuous Home Care is provided to patients while at home, including a nursing home setting, during periods of crisis when intensive monitoring and care, primarily nursing care, is required in order to achieve palliation or management of acute medical symptoms. Continuous home care requires a minimum of 8 hours of care within a 24-hour day, which begins at midnight. The care must be predominantly nursing care provided by either a registered nurse or licensed nurse practitioner. While the published Medicare continuous home care rates are daily rates, Medicare pays for continuous home care in 15 minute increments. This 15 minute rate is calculated by dividing the daily rate by 96.

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Respite Care permits a hospice patient to receive services on an inpatient basis for a short period of time in order to provide relief for the patient’s family or other caregivers from the demands of caring for the patient. A hospice can receive payment for respite care for a given patient for up to five consecutive days at a time, after which respite care is reimbursed at the routine home care rate.

Each level of care represents a separate promise under the contract of care and is provided independently for each patient contingent upon the patient’s specific medical needs as determined by a physician. However, the clinical criteria used to determine a patient’s level of care is consistent across all patients, given that, each patient is subject to the same payor rules and regulations. As a result, we have concluded that each level of care is capable of being distinct and is distinct in the context of the contract. Furthermore, we have determined that each level of care represents a stand ready service provided as a series of either days or hours of patient care. We believe that the performance obligations for each level of care meet criteria to be satisfied over time. VITAS recognizes revenue based on the service output. VITAS believes this to be the most faithful depiction of the transfer of control of services as the patient simultaneously receives and consumes the benefits provided by our performance. Revenue is recognized on a daily or hourly basis for each patient in accordance with the reimbursement model for each type of service. VITAS’ performance obligations relate to contracts with an expected duration of less than one year. Therefore, VITAS has elected to apply the optional exception provided in ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The unsatisfied or partially satisfied performance obligations referred to above relate to bereavement services provided to patients’ families for at least 12 months after discharge.

Care is provided to patients regardless of their ability to pay. Patients who meet our criteria for charity care are provided care without charge. There is no revenue or associated accounts receivable in the accompanying Consolidated Financial Statements related to charity care. The cost of providing charity care for the quarters ended September 30, 2026 and 2025 was $2.5 million and $2.3 million, respectively. The cost of providing charity care for the first nine months ended September 30, 2026 and 2025 was $6.8 million and $6.7 million, respectively. The cost of charity care is included in cost of services provided and goods sold and is calculated by taking the ratio of charity care days to total days of care and multiplying by the total cost of care.

Generally, patients who are covered by third-party payors are responsible for related deductibles and coinsurance which vary in amount. VITAS also provides service to patients without a reimbursement source and may offer those patients discounts from standard charges. VITAS estimates the transaction price for patients with deductibles and coinsurance, along with those uninsured patients, based on historical experience and current conditions. The estimate of any contractual adjustments, discounts or implicit price concessions reduces the amount of revenue initially recognized. Subsequent changes to the estimate of the transaction price are recorded as adjustments to patient service revenue in the period of change. Subsequent changes that are determined to be the result of an adverse change in the patients’ ability to pay (i.e. change in credit risk) are recorded as bad debt expense. VITAS has no material adjustments related to subsequent changes in the estimate of the transaction price or subsequent changes as the result of an adverse change in the patient’s ability to pay for any period reported.

Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to varying interpretation and change over time. Medicare and Medicaid programs have broad authority to audit and review compliance with such laws and regulations and impose payment suspensions or modifications when merited. Additionally, the contracts we have with commercial health insurance payors provide for retroactive audit and review of claims. Settlement with third party payors for retroactive adjustments due to audits, reviews or investigations are considered variable consideration and are included in the determination of the estimated transaction price for providing patient care. The variable consideration is estimated based on the terms of the payment agreement, existing correspondence from the payor and our historical settlement activity. These estimates are adjusted in future periods, as new information becomes available.

We are subject to certain limitations on Medicare payments for services which are considered variable consideration, as follows:

Inpatient Cap. If the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds 20% of the total days of hospice care such program provided to all Medicare patients for an annual period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the routine homecare rate. None of VITAS’ hospice programs exceeded the payment limits on inpatient services during the nine months ended September 30, 2026 and 2025.

Medicare Cap. We are also subject to a Medicare annual per-beneficiary cap (“Medicare Cap”). Compliance with the Medicare Cap is measured in one of two ways based on a provider election. The “streamlined” method compares total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs from September 28 through September 27 of the following year. At September 30, 2026, all our programs except three are using the “streamlined” method.

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The “proportional” method compares the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by the Medicare provider number between September 28 and September 27 of the following year with the product of the per beneficiary cap amount and a pro-rated number of Medicare beneficiaries receiving hospice services from that program during the same period. The pro-rated number of Medicare beneficiaries is calculated based on the ratio of days the beneficiary received hospice services during the measurement period to the total number of days the beneficiary received hospice services.

We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether revenues are likely to exceed the annual per-beneficiary Medicare Cap. Should we determine that revenues for a program are likely to exceed the Medicare Cap based on projected trends, we attempt to institute corrective actions, which include changes to the patient mix and increased patient admissions. However, should we project our corrective action will not prevent that program from exceeding its Medicare Cap, we estimate revenue recognized during the government fiscal year that will require repayment to the Federal government under the Medicare Cap and record an adjustment to revenue of an amount equal to a ratable portion of our best estimate for the year.

For VITAS’ patients in the nursing home setting in which Medicaid pays the nursing home room and board, VITAS serves as a pass-through between Medicaid and the nursing home. We are responsible for paying the nursing home for that patient’s room and board. Medicaid reimburses us for 95% of the amount we have paid. This results in a 5% net expense for VITAS related to nursing home room and board. This transaction creates a performance obligation in that VITAS is facilitating room and board being delivered to our patient. As a result, the 5% net expense is recognized as a contra-revenue account under ASC 606 in the accompanying financial statements.

The composition of patient care service revenue by payor and level of care for the quarter ended September 30, 2026 is as follows (in thousands):



	Medicare		Medicaid		Commercial		Total
Routine home care	$	384,628	$	13,206	$	8,135	$	405,969
Inpatient care		31,534		2,680		2,193		36,407
Continuous care		19,605		576		978		21,159
	$	435,767	$	16,462	$	11,306	$	463,535

All other revenue - self-pay, respite care, etc.								6,421
Subtotal							$	469,956
Medicare cap adjustment								(828)
Implicit price concessions								(7,743)
Room and board, net								(3,982)
Net revenue							$	457,403

The composition of patient care service revenue by payor and level of care for the quarter ended September 30, 2025 is as follows (in thousands):


	Medicare		Medicaid		Commercial		Total
Routine home care	$	341,571	$	11,604	$	9,230	$	362,405
Inpatient care		28,374		2,318		2,407		33,099
Continuous care		18,379		603		964		19,946
	$	388,324	$	14,525	$	12,601	$	415,450

All other revenue - self-pay, respite care, etc.								5,807
Subtotal							$	421,257
Medicare cap adjustment								(6,086)
Implicit price concessions								(3,571)
Room and board, net								(3,859)
Net revenue							$	407,741

‎

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The composition of patient care service revenue by payor and level of care for the nine months ended September 30, 2026 is as follows (in thousands):


	Medicare		Medicaid		Commercial		Total
Routine home care	$	1,104,696	$	38,761	$	24,950	$	1,168,407
Inpatient care		93,837		7,353		6,816		108,006
Continuous care		53,980		1,709		3,000		58,689
	$	1,252,513	$	47,823	$	34,766	$	1,335,102

All other revenue - self-pay, respite care, etc.								18,204
Subtotal							$	1,353,306
Medicare cap adjustment								(3,703)
Implicit price concessions								(17,663)
Room and board, net								(11,178)
Net revenue							$	1,320,762

The composition of patient care service revenue by payor and level of care for the nine months ended September 30, 2025 is as follows (in thousands):


	Medicare		Medicaid		Commercial		Total
Routine home care	$	1,012,360	$	33,915	$	25,739	$	1,072,014
Inpatient care		86,716		6,482		6,947		100,145
Continuous care		63,158		1,982		3,082		68,222
	$	1,162,234	$	42,379	$	35,768	$	1,240,381

All other revenue - self-pay, respite care, etc.								16,898
Subtotal							$	1,257,279
Medicare cap adjustment								(24,786)
Implicit price concessions								(9,875)
Room and board, net								(11,277)
Net revenue							$	1,211,341

Roto-Rooter

Roto-Rooter provides plumbing, drain cleaning, excavation, water restoration and other related services to both residential and commercial customers primarily in the United States. Services are provided through a network of company-owned branches, independent contractors and franchisees. Service revenue for Roto-Rooter is reported at the amount that reflects the ultimate consideration we expect to receive in exchange for providing services.

Roto-Rooter owns and operates branches focusing mainly on large population centers in the United States. Roto-Rooter’s primary lines of business in company-owned branches consist of plumbing, sewer and drain cleaning, excavation and water restoration. For purposes of ASC 606 analysis, plumbing, sewer and drain cleaning, and excavation have been combined into one portfolio and are referred to as “short-term core services”. Water restoration is analyzed as a separate portfolio. The following describes the key characteristics of these portfolios:

Short-term Core Services are plumbing, drain and sewer cleaning and excavation services. These services are provided to both commercial and residential customers. The duration of services provided in this category range from a few hours to a few days. There are no significant warranty costs or on-going obligations to the customer once a service has been completed. For residential customers, payment is received at the time of job completion before the Roto-Rooter technician leaves the residence. Commercial customers may be granted credit subject to internally designated authority limits and credit check guidelines. If credit is granted, payment terms are generally 30 days or less.

Each job in this category is a distinct service with a distinct performance obligation to the customer. Revenue is recognized at the completion of each job. Variable consideration consists of pre-invoice discounts and post-invoice discounts. Pre-invoice discounts are given in the form of coupons or price concessions. Post-invoice discounts consist of credit memos generally granted to resolve customer service issues. Variable consideration is estimated based on historical activity and recorded at the time service is completed.

Water Restoration Services involve the remediation of water and humidity after a flood. These services are provided to both commercial and residential customers. The duration of services provided in this category generally ranges from 3 to 5 days. There are no significant warranties or on-going obligations to the customer once service has been completed. The majority of these services are

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paid by the customer’s insurance company. Variable consideration relates primarily to allowances taken by insurance companies upon payment. Variable consideration is estimated based on historical activity and recorded at the time service is completed.

For both short-term core services and water restoration services, Roto-Rooter satisfies its performance obligation at a point in time. The services provided generally involve fixing plumbing, drainage or flood-related issues at the customer’s property. At the time service is complete, the customer acknowledges its obligation to pay for service and its satisfaction with the service performed. This provides evidence that the customer has accepted the service and Roto-Rooter is now entitled to payment. As such, Roto-Rooter recognizes revenue for these services upon completion of the job and receipt of customer acknowledgement. Roto-Rooter’s performance obligations for short-term core services and water restoration services relate to contracts with an expected duration of less than a year. Therefore, Roto-Rooter has elected to apply the optional exception provided in ASC 606 and is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. Roto-Rooter does not have significant unsatisfied or partially unsatisfied performance obligations at the time of initial revenue recognition for short-term core or water restoration services.

Roto-Rooter owns the rights to certain territories and contracts with independent third-parties to operate the territory under Roto-Rooter’s registered trademarks (“independent contractors”). Such contracts are for a specified term but cancellable by either party without penalty with 90 days’ advance notice. Under the terms of these arrangements, Roto-Rooter provides certain back office support and advertising along with a limited license to use Roto-Rooter’s registered trademarks. The independent contractor is responsible for all day-to-day management of the business including staffing decisions and pricing of services provided. All performance obligations of Roto-Rooter cease at the termination of the arrangement.

Independent contractors pay Roto-Rooter a standard fee calculated as a percentage of their cash collection from weekly sales. The primary value for the independent contractors under these arrangements is the right to use Roto-Rooter’s registered trademarks. Roto-Rooter recognizes revenue from independent contractors over-time (weekly) as the independent contractor’s labor sales are completed and payment from customers are received. Payment from independent contractors is also received on a weekly basis. The use of Roto-Rooter’s registered trademarks and advertising provides immediate value to the independent contractor as a result of Roto-Rooter’s nationally recognized brand. Therefore, over-time recognition provides the most faithful depiction of the transfer of services as the customer simultaneously receives and consumes the benefits provided. There is no significant variable consideration related to these arrangements.

Roto-Rooter has licensed the rights to operate under Roto-Rooter’s registered trademarks in other territories to franchisees. Each such contract is for a 10 year term but cancellable by Roto-Rooter for cause with 60 day advance notice without penalty. The franchisee may cancel the contract for any reason with 60 days advance notice without penalty. Under the terms of the contract, Roto-Rooter provides national advertising and consultation on various aspects of operating a Roto-Rooter business along with the right to use Roto-Rooter’s registered trademarks. The franchisee is responsible for all day-to-day management of the business including staffing decisions, pricing of services provided and local advertising spend and placement. All performance obligations of Roto-Rooter cease at the termination of the arrangement.

Franchisees pay Roto-Rooter a standard monthly fee based on the population within the franchise territory. The standard fee is revised on a yearly basis based on changes in the Consumer Price Index for All Urban Consumers. The primary value for the franchisees under this arrangement is the right to use Roto-Rooter’s registered trademarks. Roto-Rooter recognizes revenue from franchisees over-time (monthly). Payment from franchisees is also received on a monthly basis. The use of Roto-Rooter’s registered trademarks and advertising provides immediate value to the franchisees as a result of Roto-Rooter’s nationally recognized brand. Therefore, over-time recognition provides the most faithful depiction of the transfer of services as the customer simultaneously receives and consumes the benefits provided. There is no significant variable consideration related to these arrangements.

‎

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The composition of disaggregated revenue for the third quarter is as follows (in thousands):


	September 30,
	2026		2025
Drain cleaning	$	58,475	$	55,454
Plumbing		48,242		45,753
Excavation		61,249		57,102
Other		355		220
Subtotal - short term core		168,321		158,529
Water restoration		48,882		45,196
Independent contractors		16,867		16,871
Franchisee fees		1,575		1,433
Other		4,262		4,449
Gross revenue		239,907		226,478
Implicit price concessions and credit memos		(6,370)		(9,319)
Net revenue	$	233,537	$	217,159

The composition of disaggregated revenue for the first nine months is as follows (in thousands):


	September 30,
	2026		2025
Drain cleaning	$	175,710	$	170,553
Plumbing		145,727		137,097
Excavation		186,322		177,833
Other		856		595
Subtotal - short term core		508,615		486,078
Water restoration		143,587		149,183
Independent contractors		51,751		52,682
Franchisee fees		4,539		4,262
Other		13,649		14,127
Gross revenue		722,141		706,332
Implicit price concessions and credit memos		(21,199)		(27,032)
Net revenue	$	700,942	$	679,300

3. Segments

Our segments include the VITAS segment and the Roto-Rooter segment, which comprise the structure used by our President and Chief Executive Officer, who has been determined to be our Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance. Relative contributions of each segment to service revenues and sales for the third quarter of 2026 were 66% and 34%, respectively, compared to the third quarter of 2025 which were 65% and 35%, respectively. Relative contributions of each segment to service revenues and sales for the first nine months of 2026 were 65% and 35%, respectively, compared to the first nine months of 2025 which were 64% and 36%, respectively. The vast majority of our service revenues and sales from continuing operations are generated from business within the United States. Service revenues and sales by business segment are shown in Note 2.

The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the RRSC and RRC operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics. The characteristics of these operating segments and the basis for aggregation are reviewed annually.

We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”. Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation. Corporate investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements.

Our CODM evaluates the segments’ operating performance based mainly on income/(loss) from operations. For each segment, the CODM compares segment income/(loss) from operations in the annual budgeting and monthly forecasting process to actual results.

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The CODM considers variances on a monthly basis for evaluating performance of each segment and making decisions about allocating resources to each segment.

Segment data for the three months ended September 30, 2026 are as follows (in thousands):


					Reportable				Chemed
	VITAS		Roto-Rooter		Segments		Corporate		Consolidated
Service revenues and sales	$	457,403	$	233,537	$	690,940	$	-	$	690,940

Cost of services provided and goods sold
(excluding depreciation)
Wages		257,425		78,411		335,836		-		335,836
Patient care expense		48,205		-		48,205		-		48,205
Other expenses		36,363		37,574		73,937		-		73,937
Total cost of services provided and goods sold		341,993		115,985		457,978		-		457,978

Selling, general and administrative expense
Wages		16,710		23,102		39,812		5,090		44,902
Advertising		-		23,885		23,885		-		23,885
Stock compensation		-		-		-		9,135		9,135
Other expenses		6,390		24,046		30,436		3,111		33,547
Total selling, general and administrative expense		23,100		71,033		94,133		17,336		111,469

Depreciation		5,791		8,624		14,415		12		14,427
Amortization		25		2,949		2,974		-		2,974
Other operating expense		7,352		88		7,440		230		7,670
Total costs and expenses		378,261		198,679		576,940		17,578		594,518
Income/(loss) from operations		79,142		34,858		114,000		(17,578)		96,422

Interest expense		(54)		(145)		(199)		(1,898)		(2,097)
Intercompany interest income/(expense)		6,766		4,574		11,340		(11,340)		-
Other income - net		124		5		129		2,254		2,383
Income/(expense) before income taxes		85,978		39,292		125,270		(28,562)		96,708
Income taxes		(20,270)		(9,152)		(29,422)		4,362		(25,060)
Net income/(loss)	$	65,708	$	30,140	$	95,848	$	(24,200)	$	71,648


Additions to long-lived assets	$	7,987	$	73,703	$	81,690	$	6	$	81,696

‎

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Segment data for the three months ended September 30, 2025 are as follows (in thousands):


					Reportable				Chemed
	VITAS		Roto-Rooter		Segments		Corporate		Consolidated
Service revenues and sales	$	407,741	$	217,159	$	624,900	$	-	$	624,900

Cost of services provided and goods sold
(excluding depreciation)
Wages		239,357		72,992		312,349		-		312,349
Patient care expense		43,269		-		43,269		-		43,269
Other expenses		35,389		34,136		69,525		-		69,525
Total cost of services provided and goods sold		318,015		107,128		425,143		-		425,143

Selling, general and administrative expense
Wages		16,904		21,122		38,026		6,440		44,466
Advertising		-		19,542		19,542		-		19,542
Stock compensation		-		-		-		5,851		5,851
Other expenses		8,332		20,008		28,340		7,576		35,916
Total selling, general and administrative expense		25,236		60,672		85,908		19,867		105,775

Depreciation		5,354		8,298		13,652		12		13,664
Amortization		26		2,544		2,570		-		2,570
Other operating expense/(income)		3,036		(38)		2,998		-		2,998
Total costs and expenses		351,667		178,604		530,271		19,879		550,150
Income/(loss) from operations		56,074		38,555		94,629		(19,879)		74,750

Interest expense		(56)		(132)		(188)		(269)		(457)
Intercompany interest income/(expense)		5,685		4,030		9,715		(9,715)		-
Other income - net		61		25		86		9,165		9,251
Income/(expense) before income taxes		61,764		42,478		104,242		(20,698)		83,544
Income taxes		(14,993)		(10,407)		(25,400)		6,093		(19,307)
Net income/(loss)	$	46,771	$	32,071	$	78,842	$	(14,605)	$	64,237


Additions to long-lived assets	$	10,850	$	6,639	$	17,489	$	10	$	17,499

‎

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Segment data for the first nine months ended September 30, 2026 are as follows (in thousands):


					Reportable				Chemed
	VITAS		Roto-Rooter		Segments		Corporate		Consolidated
Service revenues and sales	$	1,320,762	$	700,942	$	2,021,704	$	-	$	2,021,704

Cost of services provided and goods sold
(excluding depreciation)
Wages		755,955		238,744		994,699		-		994,699
Patient care expense		141,158		-		141,158		-		141,158
Other expenses		108,037		107,613		215,650		-		215,650
Total cost of services provided and goods sold		1,005,150		346,357		1,351,507		-		1,351,507

Selling, general and administrative expense
Wages		51,905		68,647		120,552		15,094		135,646
Advertising		-		67,718		67,718		-		67,718
Stock compensation		-		-		-		31,189		31,189
Other expenses		23,409		69,970		93,379		13,061		106,440
Total selling, general and administrative expense		75,314		206,335		281,649		59,344		340,993

Depreciation		17,484		25,477		42,961		36		42,997
Amortization		78		8,185		8,263		-		8,263
Other operating expense		7,432		78		7,510		230		7,740
Total costs and expenses		1,105,458		586,432		1,691,890		59,610		1,751,500
Income/(loss) from operations		215,304		114,510		329,814		(59,610)		270,204

Interest expense		(158)		(466)		(624)		(3,774)		(4,398)
Intercompany interest income/(expense)		19,484		13,661		33,145		(33,145)		-
Other income - net		285		31		316		10,755		11,071
Income/(expense) before income taxes		234,915		127,736		362,651		(85,774)		276,877
Income taxes		(56,088)		(29,899)		(85,987)		14,763		(71,224)
Net income/(loss)	$	178,827	$	97,837	$	276,664	$	(71,011)	$	205,653


Additions to long-lived assets	$	21,309	$	126,760	$	148,069	$	31	$	148,100

‎

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Segment data for the first nine months ended September 30, 2025 are as follows (in thousands):


					Reportable				Chemed
	VITAS		Roto-Rooter		Segments		Corporate		Consolidated
Service revenues and sales	$	1,211,341	$	679,300	$	1,890,641	$	-	$	1,890,641

Cost of services provided and goods sold
(excluding depreciation)
Wages		716,335		226,168		942,503		-		942,503
Patient care expense		124,656		-		124,656		-		124,656
Other expenses		110,475		112,144		222,619		-		222,619
Total cost of services provided and goods sold		951,466		338,312		1,289,778		-		1,289,778

Selling, general and administrative expense
Wages		51,188		63,326		114,514		13,919		128,433
Advertising		-		56,654		56,654		-		56,654
Stock compensation		-		-		-		27,668		27,668
Other expenses		25,673		63,876		89,549		9,381		98,930
Total selling, general and administrative expense		76,861		183,856		260,717		50,968		311,685

Depreciation		15,863		24,899		40,762		36		40,798
Amortization		78		7,635		7,713		-		7,713
Other operating expense/(income)		3,155		(80)		3,075		-		3,075
Total costs and expenses		1,047,423		554,622		1,602,045		51,004		1,653,049
Income/(loss) from operations		163,918		124,678		288,596		(51,004)		237,592

Interest expense		(150)		(394)		(544)		(685)		(1,229)
Intercompany interest income/(expense)		16,436		11,930		28,366		(28,366)		-
Other income - net		170		58		228		13,742		13,970
Income/(expense) before income taxes		180,374		136,272		316,646		(66,313)		250,333
Income taxes		(45,353)		(32,344)		(77,697)		15,851		(61,846)
Net income/(loss)	$	135,021	$	103,928	$	238,949	$	(50,462)	$	188,487


Additions to long-lived assets	$	22,234	$	24,825	$	47,059	$	15	$	47,074

Identifiable assets by segment are as follows (in thousands):


	September 30,		December 31,
	2026		2025

VITAS	$	882,094	$	784,927
Roto-Rooter		652,773		528,587
Reportable segments		1,534,867		1,313,514
Corporate		183,572		224,675
Chemed consolidated	$	1,718,439	$	1,538,189

‎

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4. Earnings per Share

Earnings per share (“EPS”) are computed using the weighted average number of shares of capital stock outstanding. Earnings and diluted earnings per share are computed as follows (in thousands, except per share data):



			Net Income
For the Three Months Ended September 30,		Income		Shares	Earnings per Share
2026
	Earnings	$	71,648	13,058	$	5.49
	Dilutive stock options		-	38
	Nonvested stock awards		-	39
	Diluted earnings	$	71,648	13,135	$	5.45

2025
	Earnings	$	64,237	14,394	$	4.46
	Dilutive stock options		-	2
	Nonvested stock awards		-	13
	Diluted earnings	$	64,237	14,409	$	4.46


			Net Income
For the Nine Months Ended September 30,		Income		Shares	Earnings per Share
2026
	Earnings	$	205,653	13,300	$	15.46
	Dilutive stock options		-	2
	Nonvested stock awards		-	27
	Diluted earnings	$	205,653	13,329	$	15.43

2025
	Earnings	$	188,487	14,535	$	12.97
	Dilutive stock options		-	55
	Nonvested stock awards		-	30
	Diluted earnings	$	188,487	14,620	$	12.89

For the three and nine months ended September 30, 2026, there were 513,000 and 1.1 million, respectively, stock options excluded from the computation of dilutive earnings per share because they would have been anti-dilutive.

For the three and nine months ended September 30, 2025, there were 892,000 and 592,000, respectively, stock options excluded from the computation of dilutive earnings per share because they would have been anti-dilutive.

5. Long-Term Debt and Lines of Credit

On April 10, 2026, we replaced our existing credit facility (the “Prior Credit Agreement”) with a sixth amended and restated Credit Agreement (“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. This Credit Agreement has a floating interest rate that is the secured overnight financing rate (“SOFR”) plus an additional tiered rate which varies based on our current leverage ratio. As of September 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.

The long-term debt outstanding under the Credit Agreement as of September 30, 2026 is $236.0 million.

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The Credit Agreement contains the following quarterly financial covenants:



Description		Requirement

Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA)		< 3.50 to 1.00

Interest Coverage Ratio (Consolidated Adj. EBITDA/Consolidated Interest Expense)		> 3.00 to 1.00

We were in compliance with all debt covenants as of September 30, 2026. We have issued $47.3 million in standby letters of credit as of September 30, 2026, mainly for insurance purposes. Issued letters of credit reduce our available credit under the Credit Agreement. As of September 30, 2026, we had approximately $166.7 million of unused lines of credit available and eligible to be drawn down under the Credit Agreement.

6. Other Operating Expense

Other operating expense comprises the following (in thousands):


	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025

Legal settlements	$	7,483	$	2,850	$	7,483	$	2,850
Loss on disposal of fixed assets		187		148		257		225
Total other operating expenses	$	7,670	$	2,998	$	7,740	$	3,075

7. Other Income – Net

Other income – net comprises the following (in thousands):



	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025
Market value adjustment on assets held in deferred compensation trust	$	2,077	$	6,703	$	9,661	$	6,791
Interest income		295		2,555		1,399		7,186
Other		11		(7)		11		(7)
Total other income - net	$	2,383	$	9,251	$	11,071	$	13,970

8. Leases

Chemed and each of its operating subsidiaries are service companies. As such, real estate leases comprise the largest lease obligation (and conversely, right of use asset) in our lease portfolio. VITAS has leased office space, as well as space for inpatient units (“IPUs”) and/or contract beds within hospitals. Roto-Rooter mainly has leased office space. Our leases have remaining terms of under 1 year to 12 years, some of which include options to extend the lease for up to 5 years, and some of which include options to terminate the lease within 1 year.

Roto-Rooter purchases equipment and leases it to certain of its independent contractors. We analyzed these leases in accordance with ASC 842 and determined they are operating leases. As a result, Roto-Rooter capitalizes the equipment underlying these leases, depreciates the equipment and recognizes rental income.

We do not currently have any finance leases, therefore all lease information disclosed is related to operating leases.

‎

-20-

The components of balance sheet information related to leases were as follows:


	September 30,		‎December 31,
	2026		2025
Assets
Operating lease assets	$	144,029	$	131,151

Liabilities
Current operating leases		41,209		40,892
Noncurrent operating leases		114,985		102,867
Total operating lease liabilities	$	156,194	$	143,759

The components of lease expense for the third quarter are as follows (in thousands):


	Three months ended September 30,
	2026		2025
Lease Expense (a)
Operating lease expense	$	17,682	$	17,359
Sublease income		(18)		(28)
Net lease expense	$	17,664	$	17,331

The components of lease expense for the first nine months are as follows (in thousands):


	Nine months ended September 30,
	2026		2025
Lease Expense (a)
Operating lease expense	$	52,307	$	50,945
Sublease income		(74)		(94)
Net lease expense	$	52,233	$	50,851

(a)Includes short-term leases and variable lease costs, which are immaterial. Included in both cost of services provided and goods sold and selling, general and administrative expenses.

The components of cash flows information related to leases were as follows:


	Nine months ended September 30,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from leases	$	42,893	$	41,516

Leased assets obtained in exchange for new operating lease liabilities	$	51,761	$	37,752


Weighted Average Remaining Lease Term at September 30, 2026
Operating leases	4.84	years


Weighted Average Discount Rate at September 30, 2026
Operating leases	4.38	%

‎

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Maturity of Operating Lease Liabilities (in thousands)

2026	$	14,223
2027		46,546
2028		36,109
2029		29,621
2030		21,667
Thereafter		26,446
Total lease payments	$	174,612
Less: interest		(18,418)
Total liability recognized on the balance sheet	$	156,194

For leases commencing prior to April 2019, minimum rental payments exclude payments to landlords for real estate taxes and common area maintenance. Operating lease payments include $10.6 million related to extended lease terms that are reasonably certain of being exercised and exclude $3.4 million of lease payments for leases signed but not yet commenced.

9. Stock-Based Compensation Plans

On February 13, 2026, the Compensation/Incentive Committee of the Board of Directors (“CIC”) granted 8,400 Performance Stock Units (“PSUs”) that vest contingent upon the achievement of certain total shareholder return (“TSR”) targets as compared to the TSR of a group of peer companies for the three-year period ending December 31, 2028, the date at which such awards vest. The cumulative compensation cost of the TSR-based PSU award to be recorded over the three-year service period is $5.2 million.

On February 13, 2026, the CIC also granted 8,400 PSUs that vest contingent upon the achievement of certain earnings per share (“EPS”) targets for the three-year period ending December 31, 2028. At the end of each reporting period, the Company estimates the number of shares that it believes will ultimately be earned and records the corresponding expense over the service period of the award. We currently estimate the cumulative compensation cost of the EPS-based PSUs to be recorded over the three-year service period is $3.9 million.

10. Retirement Plans

All of the Company’s plans that provide retirement and similar benefits are defined contribution plans. These expenses include the impact of market gains and losses on assets held in deferred compensation plans and are recorded in selling, general and administrative expenses. Net gains for the Company’s retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):



Three months ended September 30,				Nine months ended September 30,
2026		2025		2026		2025
$	6,721	$	10,413	$	26,242	$	21,503

11. Legal and Regulatory Matters

The VITAS segment of the Company’s business operates in a heavily-regulated industry. As a result, the Company is subjected to inquiries and investigations by various government agencies, which can result in penalties including repayment obligations, funding withholding, or debarment, as well as to lawsuits, including qui tam actions. The following describes the material lawsuits and investigations of which the Company is currently aware.

Regulatory Matters and Litigation

VITAS was one of a group of hospice providers selected by the Office of the Inspector General’s (“OIG”) Office of Audit Services (“OAS”) for inclusion in an audit of the provision of elevated level-of-care hospice services, which reviewed 100 out of a total population of 50,850 inpatient and continuous care claims.

On August 29, 2022, VITAS received a demand letter from its Medicare Administrative Contractor (“MAC”) seeking repayment of $50.3 million. VITAS appealed the overpayment decision and deposited $50.3 million under the “Immediate Recoupment” process.

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On February 3, 2025, an Administrative Law Judge (“ALJ”) ruled that VITAS’ care met Medicare’s hospice standards for the applicable higher level of care as originally billed for all but one of the claims appealed, and therefore VITAS was entitled to receive payment for all such claims. With respect to the one claim that the judge did not fully side with VITAS, the judge found that four of the five days billed met the applicable standard and only one day did not.

In a letter dated March 18, 2025, VITAS’ MAC provided notice that due to the ALJ’s ruling the total overpayment amount was reduced to a de minimis amount, and on April 1, 2025 refunded VITAS all previously unreturned deposited amounts in excess of that dollar figure.

As a result of the previously disclosed cybersecurity incident and data breach on October 24, 2025, multiple class action lawsuits were filed against VITAS alleging various causes of action and seeking damages resulting from the breach. All outstanding cases were consolidated and the Company has reached an agreement to settle them for a non-material amount fully covered by VITAS’ cybersecurity insurance.

Regardless of the outcome of the preceding matters, dealing with the various regulatory agencies and opposing parties can adversely affect us through defense costs, potential payments, withholding of governmental funding, diversion of management time, and related publicity.

12. Concentration of Risk

As of September 30, 2026, and December 31, 2025, approximately 72% and 58%, respectively, of VITAS’ total accounts receivable balance were from Medicare and 25% and 34% respectively, of VITAS’ total accounts receivable balance were due from various state Medicaid or managed Medicaid programs. Combined accounts receivable from Medicare, Medicaid, and managed Medicaid represent approximately 81% of the consolidated net accounts receivable in the accompanying consolidated balance sheets as of September 30, 2026.

VITAS has a pharmacy services contract with one service provider for specified pharmacy services related to its hospice operations. Similarly, VITAS obtains the majority of its medical supplies from a single vendor. A large majority of VITAS’ pharmaceutical and medical supplies purchases are from these vendors. The pharmaceutical and medical supplies purchased by VITAS are available through many providers in the United States. However, a disruption from VITAS’ main service providers could adversely impact VITAS’ operations, including temporary logistical challenges and increased cost associated with getting medication and medical supplies to our patients.

13. Cash Overdrafts and Cash Equivalents

There is $17.8 million in cash overdrafts payable included in accounts payable at September 30, 2026. There were $11.0 million of cash overdrafts payable included in accounts payable at December 31, 2025.

From time to time throughout the year, 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. In 2023, Chemed began investing 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.

14. Financial Instruments

FASB’s authoritative guidance on fair value measurements defines a hierarchy which prioritizes the inputs in fair value measurements. Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities. Level 2 measurements use significant other observable inputs. Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions. In recording the fair value of assets and liabilities, companies must use the most reliable measurement available.

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The following shows the carrying value, fair value, and the hierarchy for our financial instruments as of September 30, 2026 (in thousands):


				Fair Value Measure
		Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Investments of deferred compensation plans held in trust	$	144,845	$	144,845	$	-	$	-
Cash equivalents		10,046		10,046		-		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2025 (in thousands):


				Fair Value Measure
		Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Investments of deferred compensation plans held in trust	$	140,347	$	140,347	$	-	$	-
Cash equivalents		94,273		94,273		-		-

For cash, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments. As further described in Note 5, our outstanding long-term debt has a floating interest rate that is reset at short-term intervals, generally 30 or 60 days. The interest rate we pay also includes an additional amount based on our current leverage ratio. As such, we believe our borrowings reflect significant nonperformance risks, mainly credit risk. Based on these factors, we believe the fair value of our long-term debt approximates its carrying value.

15. Capital Stock Repurchase Plan Transactions

We repurchased the following capital stock:



	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025

Total cost of repurchased shares (in thousands)	$	66,031	$	180,776	$	353,552	$	253,477
Shares repurchased		125,000		407,500		835,000		532,500
Weighted average price per share	$	528.24	$	443.62	$	423.42	$	476.02

In February 2026, the Board of Directors authorized $300.0 million for additional stock repurchases under Chemed’s existing share repurchase program. We currently have $73.7 million of authorization remaining under this share repurchase plan.

16. Acquisitions

On September 16, 2026, Roto-Rooter completed the acquisition of RotoCo, LLC (“RotoCo”), the largest independent Roto-Rooter franchise for $60.6 million using borrowings under Chemed’s existing $450.0 million revolving credit facility. The territories acquired include Northern San Diego, Palm Springs, Ventura, Bakersfield, Lancaster, Fresno, Monterey, Stockton, Manteca and Sacramento, California.

Other acquisitions completed in 2026 include the following: In the third quarter of 2026, Roto-Rooter completed one acquisition of a franchise in California for $1.9 million in cash. In the second quarter of 2026, Roto-Rooter completed two acquisitions, consisting of one franchise in New York and one franchise in Texas, for a total of $12.9 million in cash. In the first quarter of 2026, Roto-Rooter completed two acquisitions, consisting of one franchise in Texas and one franchise in California, for a total of $20.6 million in cash.

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-24-

The preliminary purchase price allocation for the acquired franchises are as follows (in thousands):


	RotoCo, LLC		All Other 2026 Acquisitions		Total
Goodwill	$	56,650	$	31,149	$	87,799
Property, plant and equipment		3,970		687		4,657
Reacquired franchise rights		-		3,279		3,279
All other identifiable intangibles assets		-		525		525
Other assets and liabilities - net		-		(210)		(210)
	$	60,620	$	35,430	$	96,050

The purchase price allocation for RotoCo is preliminary and subject to adjustment during the measurement period. The Company is finalizing its evaluation of certain acquired assets, including reacquired franchise rights and other identifiable intangible assets, and the resulting goodwill. Based on information currently available, management does not expect the final valuation to materially affect the preliminary purchase price allocation. The Company expects to complete the evaluation in the fourth quarter of 2026.

The pro forma revenue and earnings for the Company for the three and nine months ended September 30, as if all the acquisitions made in 2026 were completed on January 1, 2025 are as follows (in thousands, except per share data):


	Three months ended September 30,				Nine months ended September 30,
	2026		2025		2026		2025

Service revenues and sales	$	702,024	$	637,879	$	2,064,470	$	1,930,565
Net income	$	72,009	$	64,875	$	207,636	$	190,114
Earnings per share	$	5.51	$	4.51	$	15.61	$	13.08
Diluted earnings per share	$	5.48	$	4.50	$	15.58	$	13.00

On January 3, 2025, Roto-Rooter completed the acquisition of one franchise in Michigan for $225,000 in cash. Revenue and net income from acquisitions made in 2025 are not material.

Goodwill is assessed for impairment on a yearly basis as of October 1. The primary factor that contributed to the purchase price resulting in the recognition of goodwill is operational efficiencies expected as a result of integrating the operations of the acquisitions into the organizational structure. All goodwill recognized is deductible for tax purposes.

Shown below is movement in Goodwill (in thousands):


	VITAS		Roto-Rooter		Total
Balance at December 31, 2025	$	404,866	$	262,133	$	666,999
Business combinations		-		87,799		87,799
Foreign currency adjustments		-		(40)		(40)
Balance at September 30, 2026	$	404,866	$	349,892	$	754,758

17. Recent Accounting Standards

In November 2024, the FASB issued Accounting Standards Update “ASU 2024-03 – Disaggregation of Income Statement Expenses”. The guidance provides enhanced disclosures about commonly presented expense categories such as cost of sales, selling, general and administrative expenses and research and development. The objective is to provide investors with a better understanding of the entity’s performance, assess potential future cash flows and comparability with other entities. The guidance is effective for fiscal periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently analyzing the impact of the ASU on the current footnote disclosures.

In September 2025, the FASB issued Accounting Standards Update “ASU 2025-06 – Intangibles – Goodwill and Other – Internal – Use Software”. The guidance seeks to modernize the accounting guidance for the costs to develop software for internal use. The guidance amends the existing standard to better align with current software development methods. Entities will start capitalizing eligible costs when management has authorized and committed to funding software projects and when it is probable that the projects will be completed and used as intended. The guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently analyzing the impact of the ASU on the consolidated financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

We operate through our two wholly-owned subsidiaries, VITAS Healthcare Corporation and Roto-Rooter Group, Inc. VITAS focuses on hospice care that helps make terminally ill patients’ final days as comfortable as possible. Through its teams of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter’s services are focused on providing plumbing, drain cleaning, excavation, water restoration, and other related services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

The vast majority of the Company’s operations are located in the United States. As both operations are service companies, our employees are the most critical resource of the Company. We have very little exposure related to customers, vendors, or employees in other regions of the world. We continue to monitor macroeconomic trends and uncertainties such as inflation, the effects of recently implemented tariffs, and the potential imposition of modified or additional tariffs, as well as the impact of the war with Iran on fuel prices, which may have adverse effects on net sales and profitability. Based on preliminary analysis of the potential effects of the announced tariffs and these other factors, while we have realized an increase in fuel costs, which has affected our margins, we do not expect a material negative effect on our net sales or profitability for the remainder of fiscal year 2026. However, we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2027 planning. Economic pressures including the challenges of high inflation and the effects of increased tariffs and the impact of the war with Iran may negatively affect our net sales and profitability in the future.

The following is a summary of the key operating results (in thousands except per share amounts):



	Three months ended September 30,						Nine months ended September 30,
	2026			2025			2026			2025
Service revenues and sales	$	690,940		$	624,900		$	2,021,704		$	1,890,641
Net income	$	71,648		$	64,237		$	205,653		$	188,487
Diluted EPS	$	5.45		$	4.46		$	15.43		$	12.89
Adjusted net income	$	88,725		$	75,906		$	246,146		$	221,701
Adjusted diluted EPS	$	6.75		$	5.27		$	18.47		$	15.16
Adjusted EBITDA	$	133,785		$	109,045		$	371,847		$	326,070
Adjusted EBITDA as a % of revenue		19.4	%		17.4	%		18.4	%		17.2	%

Adjusted net income, adjusted diluted EPS, earnings before interest, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA and Adjusted EBITDA as a percent of revenue are not measures derived in accordance with US GAAP. We provide non-GAAP measures to help readers evaluate our operating results and to compare our operating performance with that of similar companies that have different capital structures. Our non-GAAP measures should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP. A reconciliation of our non-GAAP measures is presented on pages 39-41.

For the three months ended September 30, 2026, the increase in consolidated service revenues and sales was driven by a 12.2% increase at VITAS and a 7.5% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 9.4% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.2%. Acuity mix shift negatively impacted revenue growth by 25-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 increased revenue growth by 85-basis points. The increase in service revenues at Roto-Rooter was driven by an increase in all service lines.

For the nine months ended September 30, 2026, the increase in consolidated service revenues and sales was driven by a 9.0% increase at VITAS and by a 3.2% increase at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of 5.9% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.4%. Acuity mix shift negatively impacted revenue growth by 89-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 159-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 and in the Independent Contractors.

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Other acquisitions completed in 2026 include the following, in the third quarter of 2026, Roto-Rooter completed one acquisition for one franchise in California for a total of $1.9 million in cash. In the second quarter of 2026, Roto-Rooter completed two acquisitions for one franchise in New York and one franchise in Texas for a total of $12.9 million in cash. In the first quarter of 2026, Roto-Rooter completed two acquisitions for one franchise in Texas and one franchise in California for a total of $20.6 million in cash.

Financial Condition

Liquidity and Capital Resources

Material changes in the balance sheet accounts from December 31, 2025 to September 30, 2026 include the following:

A $72.3 million increase in accounts receivable due primarily to the timing of payments received from the Federal government at VITAS. We typically receive a payment in excess of $63.0 million from the Federal government for hospice services every other Friday. The timing of a period end will have a significant impact on the accounts receivable at VITAS. These changes generally normalize over a two-year period, as cash flow variations in one year are offset in the following year.

An $11.5 million increase in prepaid expenses due primarily to renewal of insurance policies during the year.

A $12.9 million increase in lease right of use asset due to lease renewals. This resulted in a similar increase in the lease liability accounts.

An $87.8 million increase in goodwill due to the six acquisitions at Roto-Rooter.

A $15.0 million increase in accrued insurance related to a $6.0 million legal settlement of a casualty insurance claim and an increase in casualty and medical insurance expenses.

A $30.7 million increase in accrued compensation due to yearly bonus accruals and timing of payroll at VITAS.

A $236.0 million increase in long-term debt due primarily to acquisitions and stock repurchases.

A $400.0 million increase in treasury stock due to stock repurchases.

Net cash provided by operating activities decreased $25.1 million from September 30, 2025 to September 30, 2026. See the Unaudited Consolidated Statements of Cash Flows on page 5 for the detail components making up the change.

Management continually evaluates cash utilization alternatives, including share repurchase, debt repurchase, acquisitions and increased dividends to determine the most beneficial use of available capital resources.

We anticipate that our operating income and cash flows will be sufficient to operate our business and meet any commitments for the foreseeable future.

Commitments and Contingencies

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. This 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 September 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 $47.3 million in standby letters of credit as of September 30, 2026, mainly for insurance purposes. Issued letters of credit reduce our available credit under the Credit Agreement. As of September 30, 2026, we have approximately $166.7 million of unused lines of credit available and are eligible to be drawn down under the 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 are in compliance with all financial and other debt covenants as of September 30, 2026.

We are subject to various lawsuits and claims in the normal course of our business. In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary. We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable. We disclose the existence of regulatory and legal actions when we believe it is reasonably possible that a loss could occur in connection with the specific action. In most instances, we are unable to make a reasonable estimate of any

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reasonably possible liability due to the uncertainty of the outcome and stage of litigation. We record legal fees associated with legal and regulatory actions as the costs are incurred.

See Note 11 in the Notes to the Unaudited Consolidated Financial Statements in Item 1 above for a description of current material legal matters.
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Results of Operations

Three months ended September 30, 2026 versus 2025 - Consolidated Results

Our service revenues and sales for the third quarter of 2026 increased 10.6% versus services revenue and sales for the third quarter of 2025. Of this increase, a $49.7 million increase was attributable to VITAS, and a $16.4 million increase was attributable to Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):



	Three months ended September 30,				Increase/(Decrease)
	2026		2025		Percent
VITAS
Routine homecare	$	405,969	$	362,405	12.0
General inpatient		36,407		33,099	10.0
Continuous care		21,159		19,946	6.1
Other		6,421		5,807	10.6
Subtotal		469,956		421,257	11.6
Medicare cap adjustment		(828)		(6,086)	86.4
Room and board - net		(3,982)		(3,859)	(3.2)
Implicit price concessions		(7,743)		(3,571)	(116.8)
Net revenue	$	457,403	$	407,741	12.2

Roto-Rooter
Drain cleaning	$	58,475	$	55,454	5.4
Plumbing		48,242		45,753	5.4
Excavation		61,249		57,102	7.3
Other		355		220	61.4
Subtotal - short term core		168,321		158,529	6.2
Water restoration		48,882		45,196	8.2
Independent contractors		16,867		16,871	(0.0)
Outside franchisee fees		1,575		1,433	9.9
Other		4,262		4,449	(4.2)
Gross revenue		239,907		226,478	5.9
Implicit price concessions		(6,370)		(9,319)	31.6
Net revenue		233,537		217,159	7.5
Total Revenues	$	690,940	$	624,900	10.6

Days of care at VITAS during the quarters were as follows:


	Three months ended September 30,		Increase/(Decrease)
	2026	2025	Percent

Routine homecare	1,872,071	1,685,859	11.0
Nursing home	312,663	309,192	1.1
Respite	12,502	12,184	2.6
Subtotal routine homecare and respite	2,197,236	2,007,235	9.5
General inpatient	30,494	28,530	6.9
Continuous care	19,683	18,309	7.5
Total days of care	2,247,413	2,054,074	9.4

The increase in service revenues at VITAS is comprised primarily of 9.4% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.2%. Acuity mix shift negatively impacted revenue growth by 25-basis points in the quarter when compared to the prior year revenue and level-of-care mix. The combination of Medicare Cap and other contra revenue changes increased revenue growth by 85-basis points.

The increase in plumbing revenues for the third quarter of 2026 versus 2025 is attributable to a 10.5% increase in price and service mix shift offset by a 5.1% decrease in job count. The increase in drain cleaning revenues for the third quarter of 2026 versus 2025 is attributable to a 6.4% increase in price and service mix offset by a 1.0% decrease in job count. Excavation and water restoration

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jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, excavation revenues increased 7.3% and water restoration revenues increased 8.2%. Implicit price concessions and credit memos decreased 31.6% mainly related to the improved collections in water restoration business.

The consolidated gross margin was 33.7% in the third quarter of 2026 as compared with 32.0% in the third quarter of 2025. On a segment basis, VITAS’ gross margin was 25.2% in the third quarter of 2026 as compared with 22.0% in the third quarter of 2025. The increase was primarily related to increased revenues including a $5.3 million decrease in Medicare Cap billing limitation in the third quarter of 2026 compared to third quarter of 2025 as well as continued focus on expense control. The Roto-Rooter segment’s gross margin was 50.3% for the third quarter of 2026 which was almost equal to the third quarter of 2025.

Selling, general and administrative expenses (“SG&A”) comprise (in thousands):


	Three months ended September 30,
	2026		2025
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts	$	106,241	$	99,288
Impact of market value adjustments related to assets held in deferred compensation trusts		2,077		6,703
Long-term incentive compensation		3,151		(216)
Total SG&A expenses	$	111,469	$	105,775

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the third quarter of 2026 were up 7.0% when compared to the third quarter of 2025. Of this increase $4.3 million was the result of increased advertising at Roto-Rooter in the third quarter of 2026 compared to the third quarter of 2025. The remaining increase was the result of normal salary increases and increased incentive compensation.

Other operating expense (in thousands):


	Three months ended September 30,
	2026		2025
Legal settlements	$	7,483	$	2,850
Loss on disposal of fixed assets		187		148
Total other operating expenses	$	7,670	$	2,998

Other income – net comprise (in thousands):


	Three months ended September 30,
	2026		2025
Market value adjustment on assets held in deferred compensation trusts	$	2,077	$	6,703
Interest income		295		2,555
Other		11		(7)
Total other income - net	$	2,383	$	9,251

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.

Our effective tax rate reconciliation is as follows (in thousands):


	Three months ended September 30,
	2026			2025

Income tax provision calculated at the statutory federal rate	$	20,308		$	17,544
State and local income taxes, less federal income tax effect		2,685			3,120
Nondeductible expenses:
Stock compensation tax expense		521			-
Other--net		1,546			(1,357)
Income tax provision	$	25,060		$	19,307
Effective tax rate		25.9	%		23.1	%

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Net income for both periods included the following after-tax items/adjustments that (reduced) or increased after-tax earnings (in thousands):


	Three months ended September 30,
	2026		2025
VITAS
Legal settlements	$	(5,076)	$	(2,152)
Roto-Rooter
Amortization of reacquired franchise agreements		(1,804)		(1,806)
Acquisition expense		(1,324)		-
Corporate
Stock option expense		(5,284)		(5,259)
Long-term incentive compensation		(2,830)		213
Excess tax expenses on stock compensation		(521)		-
Legal settlements		(238)		-
Other		-		(2,665)
Total	$	(17,077)	$	(11,669)

Three months ended September 30, 2026 versus 2025 - Segment Results

Net income/(loss) for the third quarter of 2026 versus the third quarter of 2025 by segment (in thousands):



	Three months ended September 30,
	2026		2025
VITAS	$	65,708	$	46,771
Roto-Rooter		30,140		32,071
Corporate		(24,200)		(14,605)
	$	71,648	$	64,237

After-tax earnings as a percent of revenue at VITAS in the third quarter of 2026 was 14.4% as compared to 11.5% in the third quarter of 2025. VITAS’ after-tax earnings increased primarily due to increased revenues including a $5.3 million decrease in Medicare Cap liability in the third quarter of 2026 compared to the third quarter of 2025.

Roto-Rooter’s net income was negatively impacted in the third quarter of 2026 compared to the third quarter of 2025 due to an increase in marketing, fuel, and acquisition expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the third quarter of 2026 was 13.0%, as compared to 14.8% in the third quarter of 2025.

After-tax Corporate expenses for the third quarter of 2026 increased 65.7% when compared to the third quarter in 2025 due primarily to a $2.3 million decrease in interest income related to lower cash and investment balances, a $1.6 million increase in interest expense related to an increase in long-term debt as a result of stock repurchases and acquisitions, a $1.6 million increase in intercompany interest expense, a $3.1 million increase in stock-based compensation and a $520,000 decrease in excess tax benefit related to reduced stock option exercises.

‎

-31-

Results of Operations

Nine months ended September 30, 2026 versus 2025 - Consolidated Results

Our service revenues and sales for the first nine months of 2026 increased 6.9% versus services revenue and sales for the first nine months of 2025. Of this increase, a $109.4 million increase was attributable to VITAS, and a $21.6 million increase was attributable to Roto-Rooter. The following chart shows the components of revenue by operating segment (in thousands):



	Nine months ended September 30,				Increase/(Decrease)
	2026		2025		Percent
VITAS
Routine homecare	$	1,168,407	$	1,072,014	9.0
General inpatient		108,006		100,145	7.8
Continuous care		58,689		68,222	(14.0)
Other		18,204		16,898	7.7
Subtotal		1,353,306		1,257,279	7.6
Medicare cap adjustment		(3,703)		(24,786)	85.1
Room and board - net		(11,178)		(11,277)	0.9
Implicit price concessions		(17,663)		(9,875)	(78.9)
Net revenue	$	1,320,762	$	1,211,341	9.0

Roto-Rooter
Drain cleaning	$	175,710	$	170,553	3.0
Plumbing		145,727		137,097	6.3
Excavation		186,322		177,833	4.8
Other		856		595	43.9
Subtotal - short term core		508,615		486,078	4.6
Water restoration		143,587		149,183	(3.8)
Independent contractors		51,751		52,682	(1.8)
Outside franchisee fees		4,539		4,262	6.5
Other		13,649		14,127	(3.4)
Gross revenue		722,141		706,332	2.2
Implicit price concessions		(21,199)		(27,032)	21.6
Net revenue		700,942		679,300	3.2
Total Revenues	$	2,021,704	$	1,890,641	6.9

Days of care at VITAS during the nine months ended September 30 were as follows:


	Nine months ended September 30,		Increase/(Decrease)
	2026	2025	Percent

Routine homecare	5,356,050	4,980,883	7.5
Nursing home	910,534	923,458	(1.4)
Respite	35,684	33,619	6.1
Subtotal routine homecare and respite	6,302,268	5,937,960	6.1
General inpatient	90,671	86,447	4.9
Continuous care	55,065	62,576	(12.0)
Total days of care	6,448,004	6,086,983	5.9

The increase in service revenues at VITAS is comprised primarily of 5.9% increase in days-of-care and a geographically weighted average Medicare reimbursement rate increase of approximately 2.4%. Acuity mix shift negatively impacted revenue growth by 89-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 159-basis points.

The increase in plumbing revenues for the first nine months of 2026 versus 2025 is attributable to an 11.6% 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 nine months of 2026 versus 2025 is attributable to an 8.5% increase in price and service mix offset by a 5.5% decrease in job count. The increase in excavation

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revenues for the first nine months of 2026 versus 2025 is attributable to a 6.6% increase in price and service mix shift offset by a 1.8% decrease in job count. Water restoration revenues decreased 3.8%, and contractors operations decreased 1.8%. Implicit price concessions and credit memos decreased 21.6% mainly related to the improved collections in water restoration business.

The consolidated gross margin was 33.2% in the first nine months of 2026 as compared with 31.8% in the first nine months of 2025. On a segment basis, VITAS’ gross margin was 23.9% in the first nine months of 2026 as compared with 21.5% in the first nine months of 2025. The increase was primarily related to increased revenues including a $21.1 million decrease in Medicare Cap billing limitation in the first nine months of 2026 compared to the first nine months of 2025 as well as continued focus on expense control. The Roto-Rooter segment’s gross margin was 50.6% for the first nine months of 2026 which was almost equal to the first nine months of 2025.

Selling, general and administrative expenses (“SG&A”) comprise (in thousands):


	Nine months ended September 30,
	2026		2025
SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts	$	324,428	$	301,600
Impact of market value adjustments related to assets held in deferred compensation trusts		9,661		6,791
Long-term incentive compensation		6,904		3,294
Total SG&A expenses	$	340,993	$	311,685

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for the first nine months of 2026 were up 7.6% when compared to the first nine months of 2025. $11.1 million of this increase was the result of increased advertising at Roto-Rooter in the first nine months of 2026 compared to the first nine months of 2025. The remaining increase was the result of normal salary increases and increased incentive compensation.

Other operating expense (in thousands):


	Nine months ended September 30,
	2026		2025
Legal settlements	$	7,483	$	2,850
Loss on disposal of fixed assets		257		225
Total other operating (income)/expenses	$	7,740	$	3,075

Other income – net comprise (in thousands):


	Nine months ended September 30,
	2026		2025
Market value adjustment on assets held in deferred compensation trusts	$	9,661	$	6,791
Interest income		1,399		7,186
Other		11		(7)
Total other income - net	$	11,071	$	13,970

Our effective tax rate reconciliation is as follows (in thousands):


	Nine months ended September 30,
	2026			2025

Income tax provision calculated at the statutory federal rate	$	58,144		$	52,570
State and local income taxes, less federal income tax effect		8,213			9,568
Nondeductible expenses:
Stock compensation tax expense/(benefit)		1,022			(513)
Other--net		3,845			221
Income tax provision	$	71,224		$	61,846
Effective tax rate		25.7	%		24.7	%

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Net income for both periods include the following after tax items/adjustments that (reduce) or increased after tax earnings (in thousands):



	Nine months ended September 30,
	2026		2025
VITAS
Legal settlements	$	(5,491)	$	(2,152)
Acquisition expense		(6)		-
Roto-Rooter
Amortization of reacquired franchise agreements		(5,412)		(5,419)
Acquisition expense		(1,497)		-
Corporate
Stock option expense		(20,638)		(20,576)
Long-term incentive compensation		(6,189)		(2,915)
Excess tax (expenses)/benefits on stock compensation		(1,022)		513
Legal settlements		(238)		-
Other		-		(2,665)
Total	$	(40,493)	$	(33,214)

Nine months ended September 30, 2026 versus 2025 - Segment Results

Net income/(loss) for the first nine months of 2026 versus the first nine months of 2025 by segment (in thousands):



	Nine months ended September 30,
	2026		2025
VITAS	$	178,827	$	135,021
Roto-Rooter		97,837		103,928
Corporate		(71,011)		(50,462)
	$	205,653	$	188,487

After-tax earnings as a percent of revenue at VITAS in the first nine months of 2026 was 13.5% as compared to 11.1% in the first nine months of 2025. The increase was primarily related to increased revenues including a $21.1 million decrease in Medicare Cap liability in the first nine months of 2026 compared to the first nine months of 2025.

Roto-Rooter’s net income was negatively impacted in the first nine months of 2026 compared to the first nine months of 2025 due mainly to an increase in marketing, fuel, and acquisition expenses. Roto-Rooter’s after-tax earnings as a percent of revenue in the first nine months of 2026 was 14.0%, as compared to 15.3% in the first nine months of 2025.

After-tax Corporate expenses for the first nine months of 2026 increased 40.7% when compared to the first nine months in 2025 due primarily to a $5.8 million decrease in interest income related to lower cash and investment balances, a $3.2 million increase in interest expense related to an increase in long-term debt as a result of stock repurchases and acquisitions, a $4.8 million increase in intercompany interest expense, a $3.3 million increase in stock-based compensation and a $1.5 million decrease in excess tax benefit related to reduced stock option exercises.

‎

-34-


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026
(in thousands)(unaudited)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
2026 (a)
Service revenues and sales	$	457,403	$	233,537	$	-	$	690,940
Cost of services provided and goods sold		341,993		115,985		-		457,978
Selling, general and administrative expenses		23,100		71,033		17,336		111,469
Depreciation		5,791		8,624		12		14,427
Amortization		25		2,949		-		2,974
Other operating expense		7,352		88		230		7,670
Total costs and expenses		378,261		198,679		17,578		594,518
Income/(loss) from operations		79,142		34,858		(17,578)		96,422
Interest expense		(54)		(145)		(1,898)		(2,097)
Intercompany interest income/(expense)		6,766		4,574		(11,340)		-
Other income—net		124		5		2,254		2,383
Income/(expense) before income taxes		85,978		39,292		(28,562)		96,708
Income taxes		(20,270)		(9,152)		4,362		(25,060)
Net income/(loss)	$	65,708	$	30,140	$	(24,200)	$	71,648

(a) The following amounts are included in net income (in thousands):
							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
Pretax benefit/(cost):
Legal settlements	$	(6,705)	$	-	$	(308)	$	(7,013)
Stock option expense		-		-		(5,984)		(5,984)
Long-term incentive compensation		-		-		(3,151)		(3,151)
Amortization of reacquired franchise agreements		-		(2,352)		-		(2,352)
Acquisition expense		-		(1,726)		-		(1,726)
Total	$	(6,705)	$	(4,078)	$	(9,443)	$	(20,226)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
After-tax benefit/(cost):
Legal settlements	$	(5,076)	$	-	$	(238)	$	(5,314)
Stock option expense		-		-		(5,284)		(5,284)
Long-term incentive compensation		-		-		(2,830)		(2,830)
Amortization of reacquired franchise agreements		-		(1,804)		-		(1,804)
Acquisition expense		-		(1,324)		-		(1,324)
Excess tax expense on stock compensation		-		-		(521)		(521)
Total	$	(5,076)	$	(3,128)	$	(8,873)	$	(17,077)

‎

-35-


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025
(in thousands)(unaudited)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
2025 (a)
Service revenues and sales	$	407,741	$	217,159	$	-	$	624,900
Cost of services provided and goods sold		318,015		107,128		-		425,143
Selling, general and administrative expenses		25,236		60,672		19,867		105,775
Depreciation		5,354		8,298		12		13,664
Amortization		26		2,544		-		2,570
Other operating expense/(income)		3,036		(38)		-		2,998
Total costs and expenses		351,667		178,604		19,879		550,150
Income/(loss) from operations		56,074		38,555		(19,879)		74,750
Interest expense		(56)		(132)		(269)		(457)
Intercompany interest income/(expense)		5,685		4,030		(9,715)		-
Other income—net		61		25		9,165		9,251
Income/(expense) before income taxes		61,764		42,478		(20,698)		83,544
Income taxes		(14,993)		(10,407)		6,093		(19,307)
Net income/(loss)	$	46,771	$	32,071	$	(14,605)	$	64,237

(a) The following amounts are included in net income (in thousands):
							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
Pretax benefit/(cost):
Stock option expense	$	-	$	-	$	(6,067)	$	(6,067)
Legal settlements		(2,850)		-		-		(2,850)
Amortization of reacquired franchise agreements		-		(2,352)		-		(2,352)
Long-term incentive compensation		-		-		216		216
Other		-		-		(2,665)		(2,665)
Total	$	(2,850)	$	(2,352)	$	(8,516)	$	(13,718)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
After-tax benefit/(cost):
Stock option expense	$	-	$	-	$	(5,259)	$	(5,259)
Legal settlements		(2,152)		-		-		(2,152)
Amortization of reacquired franchise agreements		-		(1,806)		-		(1,806)
Long-term incentive compensation		-		-		213		213
Other		-		-		(2,665)		(2,665)
Total	$	(2,152)	$	(1,806)	$	(7,711)	$	(11,669)

‎

-36-


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026
(in thousands)(unaudited)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
2026 (a)
Service revenues and sales	$	1,320,762	$	700,942	$	-	$	2,021,704
Cost of services provided and goods sold		1,005,150		346,357		-		1,351,507
Selling, general and administrative expenses		75,314		206,335		59,344		340,993
Depreciation		17,484		25,477		36		42,997
Amortization		78		8,185		-		8,263
Other operating expense		7,432		78		230		7,740
Total costs and expenses		1,105,458		586,432		59,610		1,751,500
Income/(loss) from operations		215,304		114,510		(59,610)		270,204
Interest expense		(158)		(466)		(3,774)		(4,398)
Intercompany interest income/(expense)		19,484		13,661		(33,145)		-
Other income—net		285		31		10,755		11,071
Income/(expense) before income taxes		234,915		127,736		(85,774)		276,877
Income taxes		(56,088)		(29,899)		14,763		(71,224)
Net income/(loss)	$	178,827	$	97,837	$	(71,011)	$	205,653

(a) The following amounts are included in net income (in thousands):
							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
Pretax benefit/(cost):
Stock option expense	$	-	$	-	$	(24,285)	$	(24,285)
Legal settlements		(7,253)		-		(308)		(7,561)
Amortization of reacquired franchise agreements		-		(7,056)		-		(7,056)
Long-term incentive compensation		-		-		(6,904)		(6,904)
Acquisition expense		(8)		(1,953)		-		(1,961)
Total	$	(7,261)	$	(9,009)	$	(31,497)	$	(47,767)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
After-tax benefit/(cost):
Stock option expense	$	-	$	-	$	(20,638)	$	(20,638)
Long-term incentive compensation		-		-		(6,189)		(6,189)
Legal settlements		(5,491)		-		(238)		(5,729)
Amortization of reacquired franchise agreements		-		(5,412)		-		(5,412)
Acquisition expense		(6)		(1,497)		-		(1,503)
Excess tax expense on stock compensation		-		-		(1,022)		(1,022)
Total	$	(5,497)	$	(6,909)	$	(28,087)	$	(40,493)

‎

-37-


CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025
(in thousands)(unaudited)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
2025 (a)
Service revenues and sales	$	1,211,341	$	679,300	$	-	$	1,890,641
Cost of services provided and goods sold		951,466		338,312		-		1,289,778
Selling, general and administrative expenses		76,861		183,856		50,968		311,685
Depreciation		15,863		24,899		36		40,798
Amortization		78		7,635		-		7,713
Other operating expense/(income)		3,155		(80)		-		3,075
Total costs and expenses		1,047,423		554,622		51,004		1,653,049
Income/(loss) from operations		163,918		124,678		(51,004)		237,592
Interest expense		(150)		(394)		(685)		(1,229)
Intercompany interest income/(expense)		16,436		11,930		(28,366)		-
Other income - net		170		58		13,742		13,970
Income/(expense) before income taxes		180,374		136,272		(66,313)		250,333
Income taxes		(45,353)		(32,344)		15,851		(61,846)
Net income/(loss)	$	135,021	$	103,928	$	(50,462)	$	188,487

(a) The following amounts are included in net income (in thousands):
							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
Pretax benefit/(cost):
Stock option expense	$	-	$	-	$	(24,374)	$	(24,374)
Amortization of reacquired franchise agreements		-		(7,056)		-		(7,056)
Long-term incentive compensation		-		-		(3,294)		(3,294)
Legal settlements		(2,850)		-		-		(2,850)
Other		-		-		(2,665)		(2,665)
Total	$	(2,850)	$	(7,056)	$	(30,333)	$	(40,239)

							Chemed
	VITAS		Roto-Rooter		Corporate		Consolidated
After-tax benefit/(cost):
Stock option expense	$	-	$	-	$	(20,576)	$	(20,576)
Amortization of reacquired franchise agreements		-		(5,419)		-		(5,419)
Long-term incentive compensation		-		-		(2,915)		(2,915)
Legal settlements		(2,152)		-		-		(2,152)
Excess tax benefits on stock compensation		-		-		513		513
Other		-		-		(2,665)		(2,665)
Total	$	(2,152)	$	(5,419)	$	(25,643)	$	(33,214)

‎

-38-


Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA

Chemed Corporation and Subsidiary Companies
(in thousands)								Chemed
For the three months ended September 30, 2026		VITAS		Roto-Rooter		Corporate		Consolidated

	Net income/(loss)	$	65,708	$	30,140	$	(24,200)	$	71,648
	Add/(deduct):
	Interest expense		54		145		1,898		2,097
	Income taxes		20,270		9,152		(4,362)		25,060
	Depreciation		5,791		8,624		12		14,427
	Amortization		25		2,949		-		2,974
	EBITDA		91,848		51,010		(26,652)		116,206
	Add/(deduct):
	Intercompany interest expense/(income)		(6,766)		(4,574)		11,340		-
	Interest income		(113)		(5)		(177)		(295)
	Legal settlements		6,705		-		308		7,013
	Stock option expense		-		-		5,984		5,984
	Long-term incentive compensation		-		-		3,151		3,151
	Acquisition expense		-		1,726		-		1,726
	Adjusted EBITDA	$	91,674	$	48,157	$	(6,046)	$	133,785

								Chemed
For the three months ended September 30, 2025		VITAS		Roto-Rooter		Corporate		Consolidated

	Net income/(loss)	$	46,771	$	32,071	$	(14,605)	$	64,237
	Add/(deduct):
	Interest expense		56		132		269		457
	Income taxes		14,993		10,407		(6,093)		19,307
	Depreciation		5,354		8,298		12		13,664
	Amortization		26		2,544		-		2,570
	EBITDA		67,200		53,452		(20,417)		100,235
	Add/(deduct):
	Intercompany interest expense/(income)		(5,685)		(4,030)		9,715		-
	Interest income		(69)		(25)		(2,462)		(2,556)
	Stock option expense		-		-		6,067		6,067
	Legal settlements		2,850		-		-		2,850
	Long-term incentive compensation		-		-		(216)		(216)
	Other		-		-		2,665		2,665
	Adjusted EBITDA	$	64,296	$	49,397	$	(4,648)	$	109,045

‎

-39-


Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA

Chemed Corporation and Subsidiary Companies
(in thousands)								Chemed
For the nine months ended September 30, 2026		VITAS		Roto-Rooter		Corporate		Consolidated

	Net income/(loss)	$	178,827	$	97,837	$	(71,011)	$	205,653
	Add/(deduct):
	Interest expense		158		466		3,774		4,398
	Income taxes		56,088		29,899		(14,763)		71,224
	Depreciation		17,484		25,477		36		42,997
	Amortization		78		8,185		-		8,263
	EBITDA		252,635		161,864		(81,964)		332,535
	Add/(deduct):
	Intercompany interest expense/(income)		(19,484)		(13,661)		33,145		-
	Interest income		(274)		(31)		(1,094)		(1,399)
	Stock option expense		-		-		24,285		24,285
	Legal settlements		7,253		-		308		7,561
	Long-term incentive compensation		-		-		6,904		6,904
	Acquisition expense		8		1,953		-		1,961
	Adjusted EBITDA	$	240,138	$	150,125	$	(18,416)	$	371,847

								Chemed
For the nine months ended September 30, 2025		VITAS		Roto-Rooter		Corporate		Consolidated

	Net income/(loss)	$	135,021	$	103,928	$	(50,462)	$	188,487
	Add/(deduct):
	Interest expense		150		394		685		1,229
	Income taxes		45,353		32,344		(15,851)		61,846
	Depreciation		15,863		24,899		36		40,798
	Amortization		78		7,635		-		7,713
	EBITDA		196,465		169,200		(65,592)		300,073
	Add/(deduct):
	Intercompany interest expense/(income)		(16,436)		(11,930)		28,366		-
	Interest income		(176)		(58)		(6,952)		(7,186)
	Stock option expense		-		-		24,374		24,374
	Long-term incentive compensation		-		-		3,294		3,294
	Legal settlements		2,850		-		-		2,850
	Other		-		-		2,665		2,665
	Adjusted EBITDA	$	182,703	$	157,212	$	(13,845)	$	326,070

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RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Net income as reported	$	71,648	$	64,237	$	205,653	$	188,487

Add/(deduct) pre-tax cost of:
Stock option expense		5,984		6,067		24,285		24,374
Legal settlements		7,013		2,850		7,561		2,850
Amortization of reacquired franchise agreements		2,352		2,352		7,056		7,056
Long-term incentive compensation		3,151		(216)		6,904		3,294
Acquisition expense		1,726		-		1,961		-
Other		-		2,665		-		2,665
Add/(deduct) tax impacts:
Tax impact of the above pre-tax adjustments (1)		(3,670)		(2,049)		(8,296)		(6,512)
Excess tax expense/(benefit) on stock compensation		521		-		1,022		(513)
Adjusted net income	$	88,725	$	75,906	$	246,146	$	221,701

Diluted Earnings Per Share As Reported
Net income	$	5.45	$	4.46	$	15.43	$	12.89
Average number of shares outstanding		13,135		14,409		13,329		14,620

Adjusted Diluted Earnings Per Share
Adjusted net income	$	6.75	$	5.27	$	18.47	$	15.16
Adjusted average number of shares outstanding		13,135		14,409		13,329		14,620

(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
OPERATING STATISTICS	2026			2025			2026			2025
Net revenue ($000)
Homecare	$	405,969		$	362,405		$	1,168,407		$	1,072,014
Inpatient		36,407			33,099			108,006			100,145
Continuous care		21,159			19,946			58,689			68,222
Other		6,421			5,807			18,204			16,898
Subtotal	$	469,956		$	421,257		$	1,353,306		$	1,257,279
Room and board, net		(3,982)			(3,859)			(11,178)			(11,277)
Contractual allowances		(7,743)			(3,571)			(17,663)			(9,875)
Medicare cap allowance		(828)			(6,086)			(3,703)			(24,786)
Total	$	457,403		$	407,741		$	1,320,762		$	1,211,341
Net revenue as a percent of total before Medicare cap allowances
Homecare		86.4	%		86.0	%		86.3	%		85.3	%
Inpatient		7.7			7.9			8.0			8.0
Continuous care		4.5			4.7			4.3			5.4
Other		1.4			1.4			1.4			1.3
Subtotal		100.0			100.0			100.0			100.0
Room and board, net		(0.8)			(0.8)			(0.8)			(0.9)
Contractual allowances		(1.7)			(0.8)			(1.3)			(0.8)
Medicare cap allowance		(0.2)			(1.4)			(0.3)			(2.0)
Total		97.3	%		97.0	%		97.6	%		96.3	%
Days of care
Homecare		1,872,071			1,685,859			5,356,050			4,980,883
Nursing home		312,663			309,192			910,534			923,458
Respite		12,502			12,184			35,684			33,619
Subtotal routine homecare and respite		2,197,236			2,007,235			6,302,268			5,937,960
Inpatient		30,494			28,530			90,671			86,447
Continuous care		19,683			18,309			55,065			62,576
Total		2,247,413			2,054,074			6,448,004			6,086,983

Number of days in relevant time period		92			92			273			273

Average daily census (days)
Homecare		20,348			18,325			19,619			18,245
Nursing home		3,399			3,361			3,335			3,383
Respite		136			132			131			123
Subtotal routine homecare and respite		23,883			21,818			23,085			21,751
Inpatient		331			310			332			317
Continuous care		214			199			202			229
Total		24,428			22,327			23,619			22,297

Total Admissions		18,995			17,714			57,514			53,398
Total Discharges		18,426			17,348			55,130			52,931
Average length of stay (days)		103.5			109.7			102.5			121.9
Median length of stay (days)		17.0			18.0			16.0			18.0

ADC by major diagnosis
Cerebro		44.1	%		44.1	%		44.4	%		44.6	%
Neurological		11.2			11.6			11.1			11.8
Cancer		9.2			10.1			9.4			9.8
Cardio		16.8			15.9			16.6			16.0
Respiratory		8.1			7.7			7.9			7.4
Other		10.6			10.6			10.6			10.4
Total		100.0	%		100.0	%		100.0	%		100.0	%
Admissions by major diagnosis
Cerebro		28.0	%		27.1	%		27.5	%		27.6	%
Neurological		6.7			6.9			6.9			6.8
Cancer		24.7			26.6			24.3			25.9
Cardio		14.9			14.3			15.3			14.7
Respiratory		12.3			10.5			12.2			10.9
Other		13.4			14.6			13.8			14.1
Total		100.0	%		100.0	%		100.0	%		100.0	%

Estimated uncollectible accounts as a percent of revenues		1.2	%		0.9	%		1.3	%		0.8	%
Accounts receivable --
Days of revenue outstanding- excluding unapplied Medicare payments		39.0			37.5			n.a.			n.a.
Days of revenue outstanding- including unapplied Medicare payments		37.4			34.0			n.a.			n.a.

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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information

Certain statements contained in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe”, “expect”, “hope”, “anticipate”, “plan” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. These forward-looking statements are based on current expectations and assumptions and involve various known and unknown risks, uncertainties, contingencies and other factors, which could cause Chemed’s actual results to differ from those expressed in such forward-looking statements. Variances in any or all of the risks, uncertainties, contingencies, and other factors from our assumptions could cause actual results to differ materially from these forward-looking statements and trends. In addition, our ability to deal with the unknown outcomes of these events, many of which are beyond our control, may affect the reliability of projections and other financial matters. Investors are cautioned that such forward-looking statements are subject to inherent risk and there are no assurances that the matters contained in such statements will be achieved. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company’s primary market risk exposure relates to interest rate risk exposure through its variable interest line of credit. At September 30, 2026, the Company has $236.0 million of variable rate debt outstanding. For each $10 million borrowed under the credit facility, an increase or decrease of 100 basis points (1%), increases or decreases the Company’s annual interest expense by $100,000.

The Company continually evaluates this interest rate exposure and periodically weighs the cost versus the benefit of fixing the variable interest rates through a variety of hedging techniques.

Item 4. Controls and Procedures

We carried out an evaluation, under the supervision of the Company’s President and Chief Executive Officer and with the participation of the Executive Vice President, Chief Financial Officer and Controller, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the President and Chief Executive Officer and Executive Vice President, Chief Financial Officer and Controller have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. There has been no change in our internal control over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For information regarding the Company’s legal proceedings, see Note 11, Legal and Regulatory Matters, under Part I, Item I of this Quarterly Report on Form 10-Q.

Item 1A. 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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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Item 2(c). Purchases of Equity Securities by Issuer and Affiliated Purchasers

The following table shows the activity related to our share repurchase program for the first nine months of 2026:



	Total Number	Weighted Average		Cumulative Shares	Dollar Amount
	of Shares	Price Paid Per		Repurchased Under	Remaining Under
	Repurchased	Share		the Program	The Program

February 2011 Program
January 1 through January 31, 2026	-	$	-	12,161,858	$	127,282,674
February 1 through February 28, 2026 (1)	-		-	12,161,858		427,282,674
March 1 through March 31, 2026	500,000		395.36	12,661,858	$	229,601,903

First Quarter Total	500,000	$	395.36

April 1 through April 30, 2026	40,300	$	422.59	12,702,158	$	212,571,327
May 1 through May 31, 2026	109,700		424.12	12,811,858		166,045,452
June 1 through June 30, 2026	60,000		438.07	12,871,858	$	139,761,356

Second Quarter Total	210,000	$	427.81

July 1 through July 31, 2026	-	$	-	12,871,858	$	139,761,356
August 1 through August 31, 2026	75,000		543.40	12,946,858		99,006,380
September 1 through September 30, 2026	50,000		505.51	12,996,858	$	73,730,994

Third Quarter Total	125,000	$	528.24


(1) In February 2026, our Board of Directors authorized an additional $300.0 million under the February 2011 Repurchase Program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.
‎

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Item 6. Exhibits



Exhibit No.		Description

10.1		Sixth Amended and Restated Credit Agreement

31.1		Certification by Kevin J. McNamara pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.

31.2		Certification by Michael D. Witzeman pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.

32.1		Certification by Kevin J. McNamara pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification by Michael D. Witzeman pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following materials from Chemed Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) The Condensed Consolidated Balance Sheet, (ii) The Condensed Consolidated Statement of Income, (iii) The Condensed Consolidated Statement of Cash Flows, (iv) The Condensed Statement of Equity, and (v) Notes to the Condensed Consolidated Financial Statements.
104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2026, formatted in iXBRL and contained in Exhibit 101.

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-45-

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Chemed Corporation
			(Registrant)


Dated:	October 29, 2026	By:	/s/ Kevin J. McNamara
			Kevin J. McNamara
			(President and Chief Executive Officer)



Dated:	October 29, 2026	By:	/s/ Michael D. Witzeman
			Michael D. Witzeman
			(Executive Vice President, Chief Financial Officer and Controller)