Financial Analysis

15. Acquisitions On March 31, 2026, Roto-Rooter completed two acquisitions, for one franchise in Texas for $ 17.36 million in cash and one franchise in California for $ 3.25 million in cash. On April 15, 2026, Roto-Rooter completed an acquisition for one franchise in New York for $ 930,000 in cash. On June 8, 2026, Roto-Rooter completed an acquisition for one franchise in Texas for $ 12.0 million in cash. 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 2026 and 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 - 32,439 32,439 Foreign currency adjustments - ( 40 ) ( 40 ) Balance at June 30, 2026 $ 404,866 $ 294,532 $ 699,398

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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 June 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 June 30, 2026 is $ 140.0 million. 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 June 30, 2026. We have issued $ 47.3 million in standby letters of credit as of June 30 , 2026, mainly for insurance purposes. Issued letters of credit reduce our available credit under the Credit Agreement. As of June 30 , 2026, we had approximately $ 262.7 million of unused lines of credit available and eligible …

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The composition of disaggregated revenue for the second quarter is as follows (in thousands): June 30, 2026 2025 Drain cleaning $ 57,501 $ 55,557 Plumbing 47,901 45,284 Excavation 61,563 56,493 Other 272 187 Subtotal - short term core 167,237 157,521 Water restoration 46,857 49,824 Independent contractors 17,118 17,449 Franchisee fees 1,443 1,405 Other 4,297 4,783 Gross revenue 236,952 230,982 Implicit price concessions and credit memos ( 7,042 ) ( 8,385 ) Net revenue $ 229,910 $ 222,597 The composition of disaggregated revenue for the first six months is as follows (in thousands): June 30, 2026 2025 Drain cleaning $ 117,235 $ 115,099 Plumbing 97,485 91,344 Excavation 125,073 120,731 Other 501 376 Subtotal - short term core 340,294 327,550 Water restoration 94,706 103,987 Independent contractors 34,884 35,811 Franchisee fees 2,964 2,828 Other 9,386 9,678 Gross revenue 482,234 479,854 Implicit price concessions and credit memos ( 14,828 ) ( 17,713 ) Net revenue $ 467,406 $ 462,141

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8. 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 . …

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10. Legal and Regulatory Matters The VITAS segment of the Companys 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 Generals (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. On February 3, 2025, an Administrative Law Judge (ALJ) ruled that VITAS care met Medicares 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 stan …

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7. 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 no t currently have any finance leases, therefore all lease information disclosed is related to operating leases. The components of balance sheet information related to leases were as follows: June 30, December 31, 2026 2025 Assets Operating lease assets $ 142,535 $ 131,151 Liabilities Current operating leases 41,277 40,892 Noncurrent operating leases 113,516 102,867 Total operating lease liabilities $ 154,793 $ 143,759 The components of lease expense for the second quarter are as follows (in thousands): Three months ended June 30, 2026 2025 Lease Expense (a) Operating lease expense $ 17,419 $ 17,110 Su …

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9. Retirement Plans All of the Companys 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 Companys retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands): Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 $ 9,597 $ 5,731 $ 19,521 $ 11,090 …

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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 physicians determination of each patients 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 th …

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3. Segments Our segment s 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 second quarter of 2026 were 66 % and 34 %, respectively, compared to the second quarter of 2025 which were 64 % and 36 %, respectively. Relative contributions of each segment to service revenues and sales for the first six months of 2026 were 65 % and 35 %, respectively, compared to the first six months of 2025 which were 63 % and 37 %, 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. Corpora …

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14. Capital Stock Repurchase Plan Transactions We repurchased the following capital stock: Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Total cost of repurchased shares (in thousands) $ 89,839 $ 42,945 $ 287,521 $ 72,701 Shares repurchased 210,000 75,000 710,000 125,000 Weighted average price per share $ 427.81 $ 572.61 $ 404.96 $ 581.62 In February 2026, the Board of Directors authorized $ 300.0 million for additional stock repurchases under Chemeds existing share repurchase program. We currently have $ 139.8 million of authorization remaining under this share repurchase plan. …

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