HCSG Reports Q3 2024 Results
Healthcare Services Group (NASDAQ:HCSG) reported Q3 2024 results with revenue of $428.1 million, aligned with expectations. Net income reached $14.0 million with diluted EPS of $0.19. The company achieved both quarterly and year-over-year growth in revenue, earnings, and cash flow. Housekeeping & laundry segment revenue was $191.1 million with 6.4% margins, while dining & nutrition segment posted $237.0 million with 5.3% margins. Cash flow from operations was $4.3 million, with adjusted cash flow at $19.0 million. The company reaffirmed Q4 revenue guidance of $430.0-$440.0 million and FY 2024 cash flow forecast of $40.0-$55.0 million.
Healthcare Services Group (NASDAQ:HCSG) ha riportato i risultati del terzo trimestre 2024 con un fatturato di $428,1 milioni, in linea con le aspettative. Il reddito netto ha raggiunto $14,0 milioni, con un utile per azione diluito di $0,19. L'azienda ha registrato una crescita sia trimestrale che anno su anno in fatturato, utile e flusso di cassa. Il fatturato del segmento servizi di pulizia e lavanderia è stato di $191,1 milioni con margini del 6,4%, mentre il segmento ristorazione e nutrizione ha registrato $237,0 milioni con margini del 5,3%. Il flusso di cassa dalle operazioni è stato di $4,3 milioni, con un flusso di cassa rettificato di $19,0 milioni. L'azienda ha riaffermato le previsioni di fatturato per il quarto trimestre di $430,0-$440,0 milioni e le previsioni di flusso di cassa per l'anno fiscale 2024 di $40,0-$55,0 milioni.
Healthcare Services Group (NASDAQ:HCSG) reportó los resultados del tercer trimestre de 2024 con ingresos de $428,1 millones, alineados con las expectativas. El ingreso neto alcanzó $14,0 millones con un beneficio por acción diluido de $0,19. La empresa logró crecimiento tanto en ingresos como en ganancias y flujo de efectivo, comparando trimestral y anualmente. Los ingresos del segmento de limpieza y lavandería fueron de $191,1 millones con márgenes del 6,4%, mientras que el segmento de alimentación y nutrición reportó $237,0 millones con márgenes del 5,3%. El flujo de efectivo de las operaciones fue de $4,3 millones, con un flujo de efectivo ajustado de $19,0 millones. La empresa reafirmó la guía de ingresos para el cuarto trimestre de $430,0-$440,0 millones y la proyección de flujo de efectivo para el año fiscal 2024 de $40,0-$55,0 millones.
Healthcare Services Group (NASDAQ:HCSG)는 2024년 3분기 결과를 보고하며 매출액이 $428.1 백만으로 예상에 부합했습니다. 순이익은 $14.0 백만에 도달했으며 희석 주당순이익은 $0.19입니다. 회사는 매출, 수익 및 현금 흐름 측면에서 분기별 및 전년 대비 성장을 기록했습니다. 청소 및 세탁 부문의 수익은 $191.1 백만으로 6.4%의 마진을 기록했으며, 식음료 부문은 $237.0 백만으로 5.3%의 마진을 나타냈습니다. 운영에서의 현금 흐름은 $4.3 백만이었으며 조정된 현금 흐름은 $19.0 백만이었습니다. 회사는 4분기 매출 가이드를 $430.0-$440.0 백만으로 재확인하고, 2024 회계연도 현금 흐름 전망을 $40.0-$55.0 백만으로 제시했습니다.
Healthcare Services Group (NASDAQ:HCSG) a rapporté des résultats pour le 3ème trimestre 2024 avec un chiffre d'affaires de $428,1 millions, conforme aux attentes. Le revenu net a atteint $14,0 millions avec un bénéfice par action dilué de $0,19. L'entreprise a obtenu une croissance tant sur le trimestre que par rapport à l'année précédente en matière de chiffre d'affaires, de bénéfices et de flux de trésorerie. Le chiffre d'affaires du secteur entretien et blanchisserie s'est élevé à $191,1 millions avec des marges de 6,4%, tandis que le secteur restauration et nutrition a affiché $237,0 millions avec des marges de 5,3%. Le flux de trésorerie provenant des opérations était de $4,3 millions, avec un flux de trésorerie ajusté de $19,0 millions. L'entreprise a réaffirmé ses prévisions de chiffre d'affaires pour le 4ème trimestre à $430,0-$440,0 millions et sa prévision de flux de trésorerie pour l'exercice 2024 de $40,0-$55,0 millions.
Healthcare Services Group (NASDAQ:HCSG) berichtete über die Ergebnisse des 3. Quartals 2024 mit einem Umsatz von $428,1 Millionen, der den Erwartungen entsprach. Der Nettogewinn erreichte $14,0 Millionen bei einem verwässerten Gewinn pro Aktie von $0,19. Das Unternehmen erzielte sowohl im Vergleich zum Vorquartal als auch im Jahresvergleich ein Wachstum bei Umsatz, Gewinn und Cashflow. Der Umsatz im Bereich Reinigung und Wäsche betrug $191,1 Millionen mit einer Marge von 6,4%, während der Bereich Essen und Ernährung $237,0 Millionen mit einer Marge von 5,3% meldete. Der Cashflow aus den Betrieben betrug $4,3 Millionen, während der bereinigte Cashflow bei $19,0 Millionen lag. Das Unternehmen bestätigte die Umsatzprognose für das 4. Quartal von $430,0-$440,0 Millionen sowie die Cashflow-Prognose für das Geschäftsjahr 2024 von $40,0-$55,0 Millionen.
- Revenue growth achieved both quarter-over-quarter and year-over-year
- Net income of $14.0 million and EPS of $0.19
- Strong liquidity position with $130.0 million in cash and marketable securities
- $500.0 million credit facility available until November 2027
- Continued share repurchase program with 6.1 million shares remaining under authorization
- High cost of services at 85.2% of revenue
- SG&A at 10.4% remains above target range of 8.5-9.5%
Insights
HCSG's Q3 performance shows steady progress with
The company maintains strong liquidity with
The reaffirmed Q4 revenue guidance of
Delivers QoQ and YoY Growth In Revenue, Earnings and Cash Flow
-
Revenue of
, in line with expectations.$428.1 million -
Net income and diluted EPS of
and$14.0 million .$0.19 -
Reported and adjusted cash flow from operations of
and$4.3 million .$19.0 million -
Reaffirms Q4 revenue estimate of
to$430.0 and FY 2024 cash flow forecast of$440.0 million to$40.0 .$55.0 million
Ted Wahl, Chief Executive Officer, stated, “We’re very pleased with our third quarter results, which underscore the positive momentum we're carrying into the fourth quarter. Executing on our three strategic priorities – driving growth, managing costs, and optimizing collections – is clearly paying off, resulting in sequential and year-over-year growth in revenue, earnings, and cash flow. Looking ahead, we are confident that our focus on these priorities, supported by our strong business fundamentals, will enable us to further accelerate growth, enhance profitability, and maximize cash flow through 2025 and beyond.”
Third Quarter Results
-
Revenue was reported at
, in line with the Company’s expectations of$428.1 million to$425.0 million .$435.0 million -
Housekeeping & laundry and dining & nutrition segment revenues and margins were
and$191.1 million 6.4% and and$237.0 million 5.3% , respectively. -
The Company’s Q4 expected revenue range is
to$430.0 .$440.0 million
-
Housekeeping & laundry and dining & nutrition segment revenues and margins were
-
Cost of services was reported at
or$364.7 million 85.2% .-
The Company’s goal is to continue to manage cost of services, excluding CECL, in the
86% range.
-
The Company’s goal is to continue to manage cost of services, excluding CECL, in the
-
SG&A was reported at
; after adjusting for the$46.9 million increase in deferred compensation; actual SG&A was$2.4 million or$44.5 million 10.4% .-
The Company’s goal continues to be achieving SG&A in the
8.5% to9.5% range.
-
The Company’s goal continues to be achieving SG&A in the
-
Net income and diluted EPS were reported at
and$14.0 million , respectively.$0.19 -
Adjusted EBITDA was reported at
.$24.8 million -
Cash flow and adjusted cash flow from operations was
and$4.3 million , respectively.$19.0 million -
The Company reaffirmed its 2024 adjusted cash flow from operations forecast in the range of
to$40.0 million .$55.0 million
-
The Company reaffirmed its 2024 adjusted cash flow from operations forecast in the range of
Balance Sheet and Liquidity
The Company’s primary sources of liquidity are cash and cash equivalents, its revolving credit facility, and cash flow from operating activities. As of the end of the third quarter, the Company had a current ratio of 2.9 to 1, cash and marketable securities of
In 2024, the Company has repurchased over 350,000 shares, or
Upcoming Events and Conference Call
The Company will be participating in the UBS Global Healthcare Conference on November 13, 2024 at the Terranea Resort Hotel in
The Company will host a conference call on Wednesday, October 23, 2024, at 8:30 a.m. Eastern Time to discuss its results for the three months ended September 30, 2024. The call may be accessed via phone at 1 (800) 715-9871, Conference ID: 9951274. The call will be simultaneously webcast under the “Events & Presentations” section of the Investor Relations page on the Company’s website, www.hcsg.com. A replay of the webcast will also be available on the website for one year following the date of the earnings call.
About Healthcare Services Group, Inc.
Healthcare Services Group (NASDAQ: HCSG) is an experienced leader in managing housekeeping, laundry, dining, and nutritional services within the healthcare industry. With more than 45 years of experience, HCSG aims to provide improved operational, regulatory, and financial outcomes for our clients.
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 federal securities laws, 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,” “estimates,” “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 to the healthcare industry and primarily providers of long-term care; the impact of and future effects of the COVID-19 pandemic or other potential pandemics; having a significant portion of our consolidated revenues contributed by one customer during the nine months ended September 30, 2024; credit and collection risks associated with the healthcare industry; the impact of bank failures; our claims experience related to workers’ compensation and general liability insurance; the effects of changes in, or interpretations of laws and regulations governing the healthcare 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; the Company's expectations with respect to selling, general, and administrative expense; the impacts of past or future cyber attacks or breaches; and the risk factors described in Part I of our Form 10-K for the fiscal year ended December 31, 2023 under “Government Regulation of Customers,” “Service Agreements and Collections,” and “Competition” and under Item 1A. “Risk Factors” in such Form 10-K.
These factors, in addition to delays in payments from customers and/or customers undergoing restructurings, 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 by continued inflation particularly if increases in the costs of labor and labor-related costs, materials, supplies and equipment used in performing services (including the impact of potential tariffs) cannot be passed on to our customers.
In addition, we believe that to improve our financial performance we must continue to obtain service agreements with new customers, retain and provide new services to existing customers, achieve modest price increases on current service agreements with existing customers and/or 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. There can be no assurance that we will be successful in that regard.
USE OF NON-GAAP FINANCIAL INFORMATION
To supplement HCSG’s consolidated financial information, which are prepared in accordance with generally accepted accounting principles in
The Company is presenting adjusted cash flows used in operations, earnings before interest, taxes, depreciation and amortization (“EBITDA”), and EBITDA excluding items impacting comparability (“Adjusted EBITDA”). We cannot provide a reconciliation of forward-looking non-GAAP measures to GAAP due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. The presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for financial statements prepared in accordance with GAAP.
HEALTHCARE SERVICES GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) (in thousands, except per share data) |
||||||||||||||||
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
||||||||||||
|
|
September 30, |
|
September 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue |
|
$ |
428,149 |
|
$ |
411,388 |
|
|
$ |
1,277,870 |
|
$ |
1,247,549 |
|||
Operating costs and expenses: |
|
|
|
|
|
|
|
|
||||||||
Cost of services |
|
|
364,730 |
|
|
|
376,936 |
|
|
|
1,108,383 |
|
|
|
1,107,519 |
|
Selling, general and administrative |
|
|
46,888 |
|
|
|
39,047 |
|
|
|
138,236 |
|
|
|
120,523 |
|
Income (loss) from operations |
|
|
16,531 |
|
|
|
(4,595 |
) |
|
|
31,251 |
|
|
|
19,507 |
|
Other income, net |
|
|
2,277 |
|
|
|
(1,738 |
) |
|
|
6,885 |
|
|
|
1,249 |
|
Income (loss) before income taxes |
|
|
18,808 |
|
|
|
(6,333 |
) |
|
|
38,136 |
|
|
|
20,756 |
|
|
|
|
|
|
|
|
|
|
||||||||
Income tax provision (benefit) |
|
|
4,778 |
|
|
|
(1,286 |
) |
|
|
10,585 |
|
|
|
5,878 |
|
Net income (loss) |
|
$ |
14,030 |
|
|
$ |
(5,047 |
) |
|
$ |
27,551 |
|
|
$ |
14,878 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) per common share |
|
$ |
0.19 |
|
|
$ |
(0.07 |
) |
|
$ |
0.37 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per common share |
|
$ |
0.19 |
|
|
$ |
(0.07 |
) |
|
$ |
0.37 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average number of common shares outstanding |
|
|
73,687 |
|
|
|
74,364 |
|
|
|
73,822 |
|
|
|
74,446 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average number of common shares outstanding |
|
|
73,926 |
|
|
|
74,364 |
|
|
|
74,007 |
|
|
|
74,496 |
|
HEALTHCARE SERVICES GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) |
|||||||
|
September 30, 2024 |
|
December 31, 2023 |
||||
Cash and cash equivalents |
$ |
27,055 |
|
$ |
54,330 |
||
Restricted cash equivalents |
|
1,084 |
|
|
|
— |
|
Marketable securities, at fair value |
|
76,776 |
|
|
|
93,131 |
|
Restricted marketable securities, at fair value |
|
25,085 |
|
|
|
— |
|
Accounts and notes receivable, net |
|
406,495 |
|
|
|
383,509 |
|
Other current assets |
|
41,623 |
|
|
|
40,726 |
|
Total current assets |
|
578,118 |
|
|
|
571,696 |
|
|
|
|
|
||||
Property and equipment, net |
|
28,435 |
|
|
|
28,774 |
|
Notes receivable — long-term, net |
|
22,908 |
|
|
|
24,832 |
|
Goodwill |
|
75,529 |
|
|
|
75,529 |
|
Other intangible assets, net |
|
10,113 |
|
|
|
12,127 |
|
Deferred compensation funding |
|
48,647 |
|
|
|
40,812 |
|
Other assets |
|
42,091 |
|
|
|
36,882 |
|
Total assets |
$ |
805,841 |
|
|
$ |
790,652 |
|
|
|
|
|
||||
Accrued insurance claims — current |
$ |
21,510 |
|
|
$ |
22,681 |
|
Other current liabilities |
|
175,694 |
|
|
|
194,247 |
|
Total current liabilities |
|
197,204 |
|
|
|
216,928 |
|
|
|
|
|
||||
Accrued insurance claims — long-term |
|
61,520 |
|
|
|
61,697 |
|
Deferred compensation liability — long-term |
|
48,915 |
|
|
|
41,186 |
|
Lease liability — long-term |
|
9,029 |
|
|
|
11,235 |
|
Other long-term liabilities |
|
425 |
|
|
|
2,990 |
|
Stockholders' equity |
|
488,748 |
|
|
|
456,616 |
|
Total liabilities and stockholders' equity |
$ |
805,841 |
|
|
$ |
790,652 |
|
HEALTHCARE SERVICES GROUP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (Unaudited) |
||||||||||||||||
Reconciliation of GAAP net income (loss) to EBITDA and adjusted EBITDA (in thousands) |
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
|||||||||||||||
|
|
2024 |
|
|
|
2023(1) |
|
|
|
2024 |
|
|
|
2023(1) |
|
|
GAAP net income (loss) |
|
$ |
14,030 |
|
|
$ |
(5,047 |
) |
|
$ |
27,551 |
|
|
$ |
14,878 |
|
Income tax provision (benefit) |
|
|
4,778 |
|
|
|
(1,286 |
) |
|
|
10,585 |
|
|
|
5,878 |
|
Interest, net |
|
|
(6 |
) |
|
|
530 |
|
|
|
132 |
|
|
|
1,119 |
|
Depreciation and amortization(2) |
|
|
3,773 |
|
|
|
3,250 |
|
|
|
10,983 |
|
|
|
10,565 |
|
EBITDA |
|
$ |
22,575 |
|
|
$ |
(2,553 |
) |
|
$ |
49,251 |
|
|
$ |
32,440 |
|
Share-based compensation |
|
|
2,231 |
|
|
|
2,384 |
|
|
|
6,828 |
|
|
|
6,793 |
|
(Gain)/loss on deferred compensation, net(3) |
|
|
(1 |
) |
|
|
(15 |
) |
|
|
(40 |
) |
|
|
67 |
|
Adjusted EBITDA |
|
$ |
24,805 |
|
|
$ |
(184 |
) |
|
$ |
56,039 |
|
|
$ |
39,300 |
|
Adjusted EBITDA as a percentage of revenue |
|
|
5.8 |
% |
|
|
0.0 |
% |
|
|
4.4 |
% |
|
|
3.2 |
% |
Reconciliation of GAAP cash flows provided by (used in) operations to adjusted cash flows provided by operations (in thousands) |
|
For the Three Months Ended |
|
For the Nine Months Ended |
||||||||||||
|
September 30, |
|
September 30, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
GAAP cash flows provided by (used in) operations |
|
$ |
4,312 |
|
$ |
2,940 |
|
$ |
(5,402 |
) |
|
$ |
(5,947 |
) |
||
Accrued payroll(4) |
|
|
14,682 |
|
|
|
15,657 |
|
|
|
12,820 |
|
|
|
16,118 |
|
Adjusted cash flows provided by operations |
|
$ |
18,994 |
|
|
$ |
18,597 |
|
|
$ |
7,418 |
|
|
$ |
10,171 |
|
1. |
For the three and nine months ended September 30, 2023, the Company's presentation of GAAP Net Income (Loss) has been revised to reflect the impact of an accounting error related to the Company’s estimate for accrued vacation that was immaterial to the Company’s previously reported consolidated financial statements or unaudited interim condensed consolidated financial statements. The Company's presentation of EBITDA and Adjusted EBITDA have also been revised to reflect the removal of certain reconciling items between reported GAAP figures and non-GAAP figures. |
2. |
Includes right-of-use asset depreciation of |
3. |
The Company offers a Supplemental Executive Retirement Plan (“SERP”) for executives and certain key employees which is also referred to as the Company’s “Deferred Compensation” plan. For SERP participants, the Company has historically retained, and anticipates continuing to retain, |
4. |
The accrued payroll adjustment reflects changes in accrued payroll for the three and nine months ended September 30, 2024 and 2023. The Company processes payroll on set weekly and bi-weekly schedules, and the timing of payments may result in operating cash flow increases or decreases which are not indicative of the Company’s quarterly cash flow performance. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241023384049/en/
Theodore Wahl
President and Chief Executive Officer
Matthew J.
Chief Communications Officer
215-639-4274
investor-relations@hcsgcorp.com
Source: Healthcare Services Group, Inc.
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