Healthcare Services Group, Inc. Provides Update on First Quarter Results
April 16 2018 - 7:00AM
Healthcare Services Group, Inc. (NASDAQ:HCSG) today announced that
in the first quarter of 2018, the company increased its accounts
receivable allowance primarily related to the corporate
restructurings of two privately-held, multi-state operators. The
company expects the corresponding expense to unfavorably impact
1Q2018 EPS by $0.36-$0.38/share. In conjunction with those
restructurings, the company renegotiated certain financial terms
and conditions, including accelerated payments. Accordingly,
the company expects no impact on future revenue, net income or EPS.
The company also announced it achieved key operational and
financial milestones related to the 2Q2017 dining & nutrition
expansion with Genesis HealthCare and converted approximately $25
million of accounts receivable to notes receivable. This aligns
with the company’s strategy to proactively strengthen customer
payment obligations and further enhance its position within their
capital structures.
The Company intends to release financial results for the first
quarter ended March 31, 2018 on Tuesday, April 17th. The
Company will host a conference call on Wednesday, April 18th
at 8:30 a.m. Eastern Time to discuss its results for the three
months ended March 31, 2018. 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, April 18, 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 healthcare industry, primarily providers of
long-term care; having several clients who individually
contributed over 3%, with one as high as 20% of our
total consolidated revenues for the three months ended March
31, 2018 ; 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, 2017 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 |
|
Chief
Communications Officer |
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215-639-4274 |
investor-relations@hcsgcorp.com |
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