Good day ladies and gentlemen, and welcome to the Q2 2017 Chemed Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Following managements prepared remarks, we will host a question-and-answer session and our instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. Now I will hand the presentation over to Sherri Warner, Chemed Investor Relations. Ma'am, please proceed.

Good morning. Our conference call this morning will review the financial results for the second quarter of 2017 ended June 30, 2017. Before we begin, let me remind you that the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call. During the course of this call, the Company will make various remarks concerning management's expectations, predictions, plans and prospects that constitute forward-looking statements. Actual results may differ materially from those projected by these forward-looking statements as a result of a variety of factors, including those identified in the company's news release of July 25 and in various other filings with the SEC. You are cautioned that any forward-looking statements reflect management's current view only and that the company undertakes no obligation to revise or update such statements in the future. In addition, management may also discuss non-GAAP operating performance results during today's call, including earnings before interest, taxes, depreciation and amortization or EBITDA and adjusted EBITDA. A reconciliation of these non-GAAP results is provided in the company's press release dated July 25, which is available on the company's website at chemed.com. I would now like to introduce our speakers for today; Kevin McNamara, President and Chief Executive Officer of Chemed Corporation; Dave Williams, Executive Vice President and Chief Financial Officer of Chemed; and Nick Westfall, Chief Executive Officer of Chemed's VITAS Healthcare Corporation subsidiary. I will now turn the call over to Kevin McNamara.

Thank you, Sherri. Good morning. Welcome to Chemed Corporation's second quarter 2017 conference call. I will begin with highlights for the quarter, and David and Nick will follow with additional operating detail. I will then open the call up for questions. As most of you are aware, in the quarter Chemed recorded an after-tax charge of $55.8 million or $3.49 per share for potential litigation settlement relating to a U.S. Department of Justice complaint filed against the Company in May of 2013. We are required by the U.S. Generally Accepted Accounting Principles to accrue for contingent litigation claim when it is probable that a liability has been incurred and the amount can be reasonably estimated. Based on recent case developments, including recent mediation discussions with the U.S. Department of Justice, I believe that it is probable that this matter can be settled accordingly. However, the achievement of a final, definitive settlement will require the parties to resolve several outstanding issues, and there can be no assurance that such a final, definitive settlement will be reached. Now let us focus on what was an excellent quarter in terms of operational performance and financial results. In the second quarter of 2017 Chemed generated $415 million of revenue, an increase of 6.3%. Consolidated net income in the quarter excluding potential litigation settlement and other discreet items generated adjusted earnings per diluted share of $2.15, an increase of 19.4%. Both VITAS and Roto-Rooter performed well exceeding the high-end of our internal projections. VITAS after lapping the disruption created by the 2016 rebasing generated on a Unit-for-Unit basis admissions growth in the quarter of 1.3%, an average daily census growth of 3.4%. Roto-Rooter's continues to show excellent results in our core plumbing and drain cleaning service segments, as well as strong growth in water restoration. This resulted in Roto-Rooter having record revenue, EBITDA and adjusted EBITDA margin in the quarter. During the quarter, the company repurchased 150,000 shares of Chemed stock for $30.8 million, which equates to a cost per share of $205.34. With that, I would like to turn this teleconference over to David Williams, our Chief Financial Officer.

Thanks, Kevin. Net revenue for VITAS was $285 million in the second quarter of 2017, which is an increase of 2.1% when compared to the prior year period. This revenue increase was comprised of a geographically weighted average Medicare reimbursement rate increase of approximately 1.7%, a 2.8% increase in average daily census offset by acuity mix shift, which negatively impacted revenue 2.5% when compared to the prior year period. VITAS recorded $247,000 in Medicare Cap billing limitations in the quarter, all of which related to prior year’s Medicare Cap billing periods. At June 30, 2017, VITAS had 30 Medicare provider numbers, none of which has an estimated 2017 Medicare Cap billing limitation. Our average revenue per patient per day in the quarter was $190.96, which is 0.6% below the prior-year period. Routine home care reimbursement and high acuity care averaged $163.11 and $722.16, respectively. During the quarter, high acuity days of care were 5.0% of total days of care, which is 85 basis points less than the prior-year quarter. The second quarter of 2017 gross margin, excluding Medicare Cap, was 22.9%, which is a 133 basis point improvement when compared to the second quarter of 2016. Our Routine homecare direct gross margin was 52.8% in the quarter, an increase of 90 basis points when compared to the second quarter of 2016. Direct inpatient margin in the quarter was 3.7% and compares to 4.6% in the prior year period. Occupancy of our 29 dedicated inpatient units averaged 68.8% in the quarter and compared to a 74.3% occupancy rate in the second quarter of 2016. Continuous care had a direct gross margin of 18.0%, an increase of 420 basis points when compared to the prior year quarter. Average hours billed for a day of continuous care was 17.9 in the quarter, which…

Thanks, David. VITAS had a solid quarter, both financially and operationally. On a unit-for-unit average daily census in the second quarter of 2017 was 16,398 patients, an increase of 3.4% over the prior year. Total unit-for-unit admissions in the quarter were 16,311, an increase of 1.3%. During the quarter, admissions generated from hospital referrals which typically represents over 50% of our admissions increased 1.6%, home-based admissions increased 2.8%, nursing home admissions decreased 2.2% and assisted living facility admissions declined 0.6% in the quarter. Our per patient per day ancillary costs, which include durable medical equipment, supplies and pharmaceutical costs averaged $14.51 and are 8.9% favorable when compared to the $15.92, the cost of these items incurred in the prior year quarter. Our inpatient care currently consists of 29 dedicated units as well as contract beds. We evaluate inpatient capacity on a market by market basis to ensure these facilities are appropriately positioned to meet the needs of our patients in every community we serve. This process involves reviewing all of our existing and potential future inpatient contractual arrangements and where necessary working with our partners to renew, restructure or exit the facility to best service the community. Within continuous care, we've also enhanced our focus on the labor management of continuous care related to appropriate nursing to aid staffing assignments and the appropriate utilization of outside nursing agencies based upon the patient's location and the individual needs. These efforts improved our continuous care margins 420 basis points when compared to the second quarter of 2016. VITAS' average length of stay in the quarter was 85.2 days, which compares to 84.2 days in the prior year quarter. Medium length of stay was 16 days in the quarter and is equal to the prior year quarter. Median length of stay is a key indicator of our penetration into the high acuity sector of the market. With that, I'd like to turn this call back over to Kevin.

Thank you, Nick. I will now open this teleconference to questions.

Well, my only closing remarks is to thank our operating executives who are here for achieving another very good quarter, and we have raised guidance and I have a degree of confidence that that is certainly achievable and we will do our best to do so. Thank you for your kind attention and we will reconvene at about three months.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program. You may all disconnect. Everybody have a wonderful day.