Healthcare Services Group, Inc. Increases Fourth Quarter Cash Dividend, Provides Update on 2017 Results
January 30 2018 - 5:43PM
Healthcare Services Group, Inc.’s (NASDAQ:HCSG) Board of Directors
has declared a quarterly cash dividend of $0.19125 per common
share, payable on March 23, 2018 to shareholders of record at
the close of business on February 16, 2018. This represents
the 59th consecutive quarterly cash dividend payment, as well as
the 58th consecutive increase since our initiation of quarterly
cash dividend payments in 2003.
On December 22, 2017, the Tax Cuts and Jobs Act
was signed into law, enacting significant changes to corporate tax
rates, as well as business-related exclusions, deductions and
credits. During the fourth quarter 2017, the Company recognized the
effects of the changes in the tax law and rates on its deferred tax
balances. The Company expects the impact of this remeasurement to
increase its provision for income taxes by approximately $4.5
million.
The Company estimates that its effective tax
rate for 2018 including the impact of its continuing participation
in the Work Opportunity Tax Credit program, will be approximately
21% to 23%.
The Company intends to release financial results
for the three months and year ended December 31, 2017 on
Tuesday, February 6, 2018. The Company will host a conference
call on Wednesday, February 7, 2018 at 8:30 a.m. Eastern Time
to discuss its results for the three months and year ended
December 31, 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 webcast will
also be available on our website through approximately 10:00 p.m.
Eastern Time on Wednesday, February 7, 2018. The webcast will
also be available on our website for one year following the date of
the earnings call.
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 several
significant clients which, both individually and in the aggregate,
accounted for a significant portion of our total consolidated
revenues for the year ended December 31, 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; realization of our expectations regarding the
impact of the Tax Cuts and Jobs Act on our financial results; 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: |
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Theodore Wahl |
|
Matthew J. McKee |
President and Chief Executive Officer |
|
Senior
Vice President of Strategy |
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215-639-4274 |
investor-relations@hcsgcorp.com |
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