Healthcare Services Group, Inc. Reports Results for the Three and Nine Months Ended September 30, 2017 and Announces Increase...
October 17 2017 - 4:05PM
Healthcare Services Group, Inc. (NASDAQ:HCSG) reported that
revenues for the three months ended September 30, 2017 increased
approximately 25% to $491.4 million. Net income for the three
months ended September 30, 2017 was $23.5 million, or $0.32 per
basic and $0.31 per diluted common share, compared to the three
months ended September 30, 2016 net income of $19.7
million, or $0.27 per basic and diluted common
share.
Revenues for the nine months ended September 30,
2017 increased approximately 17% to $1.4 billion. Net income for
the nine months ended September 30, 2017 was $68.0 million, or
$0.93 per basic and $0.92 per diluted common share, compared to the
nine months ended September 30, 2016 net income of $57.1
million, or $0.79 per basic and $0.78 per diluted
common share.
In addition, our Board of Directors declared a
quarterly cash dividend of $0.19 per common share, payable on
December 22, 2017 to shareholders of record at the close of
business on November 17, 2017. This represents the 58th
consecutive quarterly cash dividend payment, as well as the 57th
consecutive increase since our initiation of quarterly cash
dividend payments in 2003.
The Company will host a conference call on
Wednesday, October 18, 2017 at 8:30 a.m. Eastern Time to
discuss its results for the three and nine months ended September
30, 2017. The call may be accessed via phone at 800-893-5360. The
call will be simultaneously webcast under the “Events &
Presentations” section of the investor relations page on our
website, www.hcsg.com. A replay of the earnings call may be
accessed through the phone number above through 10:00 p.m. Eastern
Time on Wednesday, October 18, 2017. The webcast will also be
available on our website for one year following the date of the
earnings call.
The Company also announced that it will be presenting at the
Credit Suisse Healthcare Conference on November 8, 2017 at The
Phoenician in Scottsdale, Arizona, as well as at the Stifel
Healthcare Conference on November 14, 2017 at the Lotte New York
Palace Hotel in New York City, New York.
Cautionary Statement Regarding
Forward-Looking Statements
This release and any schedules incorporated by
reference into it may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
which are not historical facts but rather are based on current
expectations, estimates and projections about our business and
industry, and our beliefs and assumptions. Words such as
“believes,” “anticipates,” “plans,” “expects,” “will,” “goal,” and
similar expressions are intended to identify forward-looking
statements. The inclusion of forward-looking statements should not
be regarded as a representation by us that any of our plans will be
achieved. We undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise. Such forward-looking
information is also subject to various risks and uncertainties.
Such risks and uncertainties include, but are not limited to, risks
arising from our providing services exclusively to the health care
industry, primarily providers of long-term care; having one client
which accounted for approximately 16% and another client which
accounted for approximately 9% of our total consolidated revenues
for the nine months ended September 30, 2017; credit and collection
risks associated with this industry; our claims experience related
to workers’ compensation and general liability insurance; the
effects of changes in, or interpretations of laws and regulations
governing the industry, our workforce and services provided,
including state and local regulations pertaining to the taxability
of our services and other labor related matters such as minimum
wage increases; continued realization of tax benefits arising from
our corporate reorganization and self-funded health insurance
program; risks associated with the reorganization of our corporate
structure; and the risk factors described in Part I of our Form
10-K for the fiscal year ended December 31, 2016 under
“Government Regulation of Clients,” “Competition’’ and “Service
Agreements and Collections,” and under Item IA “Risk Factors” in
such Form 10-K.
These factors, in addition to delays in payments
from clients and/or clients in bankruptcy or clients with which we
are in litigation to collect payment, have resulted in, and could
continue to result in, significant additional bad debts in the near
future. Additionally, our operating results would be adversely
affected if unexpected increases in the costs of labor and
labor-related costs, materials, supplies and equipment used in
performing services could not be passed on to our clients.
In addition, we believe that to improve our
financial performance we must continue to obtain service agreements
with new clients, retain and provide new services to existing
clients, achieve modest price increases on current service
agreements with existing clients and maintain internal cost
reduction strategies at our various operational levels.
Furthermore, we believe that our ability to sustain the internal
development of managerial personnel is an important factor
impacting future operating results and the successful execution of
our projected growth strategies.
Healthcare Services Group, Inc. is the largest
national provider of professional housekeeping, laundry and dietary
services to long-term care and related health care facilities.
Company Contacts: |
|
|
|
|
|
|
|
|
|
Theodore Wahl |
|
Matthew J. McKee |
|
|
President and Chief
Executive Officer |
|
Senior Vice President
of Strategy |
|
|
|
|
|
|
|
215-639-4274 |
|
|
|
|
investor-relations@hcsgcorp.com |
|
|
|
|
HEALTHCARE SERVICES GROUP, INC. |
CONSOLIDATED STATEMENTS OF
INCOME |
(Unaudited) |
(in thousands, except per share
data) |
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|
September 30, |
|
September 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
$ |
491,355 |
|
|
$ |
392,734 |
|
|
$ |
1,366,721 |
|
|
$ |
1,164,097 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
Cost of
services provided |
426,924 |
|
|
336,340 |
|
|
1,179,816 |
|
|
998,595 |
|
Selling,
general and administrative |
32,940 |
|
|
27,182 |
|
|
93,141 |
|
|
78,192 |
|
Income from
operations |
31,491 |
|
|
29,212 |
|
|
93,764 |
|
|
87,310 |
|
Other income: |
|
|
|
|
|
|
|
Investment and interest |
1,439 |
|
|
1,359 |
|
|
4,523 |
|
|
2,548 |
|
Income before income
taxes |
32,930 |
|
|
30,571 |
|
|
98,287 |
|
|
89,858 |
|
Income taxes |
9,458 |
|
|
10,860 |
|
|
30,247 |
|
|
32,761 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
23,472 |
|
|
$ |
19,711 |
|
|
$ |
68,040 |
|
|
$ |
57,097 |
|
|
|
|
|
|
|
|
|
Basic earnings per
common share |
$ |
0.32 |
|
|
$ |
0.27 |
|
|
$ |
0.93 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share |
$ |
0.31 |
|
|
$ |
0.27 |
|
|
$ |
0.92 |
|
|
$ |
0.78 |
|
|
|
|
|
|
|
|
|
Cash dividends declared
per common share |
$ |
0.19000 |
|
|
$ |
0.18500 |
|
|
$ |
0.56625 |
|
|
$ |
0.55125 |
|
|
|
|
|
|
|
|
|
Basic weighted average
number of common shares outstanding |
73,461 |
|
|
72,839 |
|
|
73,272 |
|
|
72,718 |
|
|
|
|
|
|
|
|
|
Diluted weighted
average number of common shares outstanding |
74,538 |
|
|
73,592 |
|
|
74,252 |
|
|
73,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
HEALTHCARE SERVICES GROUP, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
|
|
September 30, 2017 |
|
December 31, 2016 |
|
(Unaudited) |
|
|
Cash and cash
equivalents |
$ |
11,005 |
|
|
$ |
23,853 |
|
Marketable securities,
at fair value |
70,384 |
|
|
67,730 |
|
Accounts and notes
receivable, net |
367,009 |
|
|
271,276 |
|
Other current
assets |
67,144 |
|
|
51,765 |
|
Total
current assets |
515,542 |
|
|
414,624 |
|
|
|
|
|
Property and equipment,
net |
13,499 |
|
|
13,455 |
|
Notes receivable - long
term |
11,495 |
|
|
7,531 |
|
Goodwill |
51,084 |
|
|
44,438 |
|
Other intangible
assets, net |
32,075 |
|
|
14,409 |
|
Deferred compensation
funding |
27,387 |
|
|
24,119 |
|
Other assets |
10,460 |
|
|
9,870 |
|
Total Assets |
$ |
661,542 |
|
|
$ |
528,446 |
|
|
|
|
|
Accrued insurance
claims - current |
$ |
24,827 |
|
|
$ |
23,573 |
|
Other current
liabilities |
150,555 |
|
|
77,298 |
|
Total
current liabilities |
175,382 |
|
|
100,871 |
|
|
|
|
|
Accrued insurance
claims - long term |
67,818 |
|
|
64,080 |
|
Deferred compensation
liability |
27,886 |
|
|
24,653 |
|
Stockholders'
equity |
390,456 |
|
|
338,842 |
|
Total Liabilities and
Stockholders' Equity |
$ |
661,542 |
|
|
$ |
528,446 |
|
|
|
|
|
|
|
|
|
Healthcare Services (NASDAQ:HCSG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Healthcare Services (NASDAQ:HCSG)
Historical Stock Chart
From Jul 2023 to Jul 2024