HCSG Reports Q4 2024 Results
Healthcare Services Group (NASDAQ:HCSG) reported Q4 2024 results with revenue of $437.8 million and net income of $11.9 million, resulting in diluted EPS of $0.16. The company's housekeeping & laundry segment generated revenue of $192.7 million with a 10.2% margin, while dining & nutrition segment revenue was $245.1 million with a 4.7% margin.
Cash flow from operations was $36.2 million, with actual cash flow of $27.0 million after adjusting for payroll accrual. The company maintains a strong financial position with $135.8 million in cash and marketable securities, plus a $500.0 million credit facility.
Looking ahead, HCSG expects mid-single digit revenue growth in 2025, with Q1 revenue projected between $440.0 to $450.0 million. The company aims to manage cost of services in the 86% range and SG&A between 8.5% to 9.5%. 2025 cash flow from operations is expected to range from $45.0 to $60.0 million.
Healthcare Services Group (NASDAQ:HCSG) ha riportato i risultati del Q4 2024 con un fatturato di 437,8 milioni di dollari e un utile netto di 11,9 milioni di dollari, risultando in un EPS diluito di $0,16. Il segmento di pulizia e lavanderia dell'azienda ha generato un fatturato di 192,7 milioni di dollari con un margine del 10,2%, mentre il fatturato del segmento di ristorazione e nutrizione è stato di 245,1 milioni di dollari con un margine del 4,7%.
Il flusso di cassa dalle operazioni è stato di 36,2 milioni di dollari, con un flusso di cassa effettivo di 27,0 milioni di dollari dopo l'aggiustamento per l'accantonamento degli stipendi. L'azienda mantiene una solida posizione finanziaria con 135,8 milioni di dollari in contanti e titoli negoziabili, oltre a una linea di credito di 500,0 milioni di dollari.
Guardando al futuro, HCSG prevede una crescita del fatturato a cifre singole nel 2025, con un fatturato previsto per il Q1 compreso tra 440,0 e 450,0 milioni di dollari. L'azienda punta a gestire il costo dei servizi nella fascia dell'86% e le spese generali e amministrative tra l'8,5% e il 9,5%. Si prevede che il flusso di cassa dalle operazioni nel 2025 varierà da 45,0 a 60,0 milioni di dollari.
Healthcare Services Group (NASDAQ:HCSG) reportó los resultados del Q4 2024 con ingresos de 437.8 millones de dólares y un ingreso neto de 11.9 millones de dólares, resultando en un EPS diluido de $0.16. El segmento de limpieza y lavandería de la empresa generó ingresos de 192.7 millones de dólares con un margen del 10.2%, mientras que los ingresos del segmento de alimentación y nutrición fueron de 245.1 millones de dólares con un margen del 4.7%.
El flujo de efectivo de las operaciones fue de 36.2 millones de dólares, con un flujo de efectivo real de 27.0 millones de dólares después de ajustar por la acumulación de nómina. La empresa mantiene una sólida posición financiera con 135.8 millones de dólares en efectivo y valores negociables, además de una línea de crédito de 500.0 millones de dólares.
De cara al futuro, HCSG espera un crecimiento de ingresos de cifras de un solo dígito en 2025, con ingresos proyectados para el Q1 entre 440.0 y 450.0 millones de dólares. La empresa tiene como objetivo gestionar el costo de los servicios en el rango del 86% y los gastos generales y administrativos entre el 8.5% y el 9.5%. Se espera que el flujo de efectivo de las operaciones en 2025 oscile entre 45.0 y 60.0 millones de dólares.
Healthcare Services Group (NASDAQ:HCSG)는 2024년 4분기 결과를 보고하며, 매출은 4억 3,780만 달러였고, 순이익은 1,190만 달러로 희석주당순이익(EPS)은 $0.16에 달했습니다. 회사의 청소 및 세탁 부문은 1억 9,270만 달러의 매출을 기록했으며, 10.2%의 마진을 보였고, 식사 및 영양 부문은 2억 4,510만 달러의 매출을 올렸으며, 4.7%의 마진을 기록했습니다.
운영에서의 현금 흐름은 3,620만 달러였으며, 급여 발생을 조정한 후 실제 현금 흐름은 2,700만 달러였습니다. 회사는 1억 3,580만 달러의 현금 및 유가 증권과 5억 달러의 신용 시설을 보유하며 강력한 재무 상태를 유지하고 있습니다.
앞으로 HCSG는 2025년에 중간 단일 자릿수의 매출 성장을 예상하며, 1분기 매출은 4억 4,000만에서 4억 5,000만 달러 사이로 예상하고 있습니다. 회사는 서비스 비용을 86% 범위 내에서 관리하고, SG&A를 8.5%에서 9.5% 사이로 유지하는 것을 목표로 하고 있습니다. 2025년 운영에서의 현금 흐름은 4,500만에서 6,000만 달러 사이로 예상됩니다.
Healthcare Services Group (NASDAQ:HCSG) a rapporté les résultats du Q4 2024 avec des revenus de 437,8 millions de dollars et un revenu net de 11,9 millions de dollars, ce qui donne un BPA dilué de 0,16 $. Le segment nettoyage et blanchisserie de l'entreprise a généré des revenus de 192,7 millions de dollars avec une marge de 10,2%, tandis que les revenus du segment restauration et nutrition s'élevaient à 245,1 millions de dollars avec une marge de 4,7%.
Le flux de trésorerie provenant des opérations s'élevait à 36,2 millions de dollars, avec un flux de trésorerie réel de 27,0 millions de dollars après ajustement pour les provisions de paie. L'entreprise maintient une solide position financière avec 135,8 millions de dollars en liquidités et titres négociables, ainsi qu'une ligne de crédit de 500,0 millions de dollars.
En regardant vers l'avenir, HCSG s'attend à une croissance des revenus à un chiffre unique en 2025, avec des revenus projetés pour le Q1 compris entre 440,0 et 450,0 millions de dollars. L'entreprise vise à gérer le coût des services dans la fourchette de 86% et les SG&A entre 8,5% et 9,5%. Le flux de trésorerie provenant des opérations en 2025 est prévu entre 45,0 et 60,0 millions de dollars.
Healthcare Services Group (NASDAQ:HCSG) berichtete über die Ergebnisse des Q4 2024 mit einem Umsatz von 437,8 Millionen Dollar und einem Nettogewinn von 11,9 Millionen Dollar, was zu einem verwässerten EPS von $0,16 führte. Das Segment Reinigung und Wäsche des Unternehmens erzielte einen Umsatz von 192,7 Millionen Dollar mit einer Marge von 10,2%, während der Umsatz des Segments Essen und Ernährung 245,1 Millionen Dollar mit einer Marge von 4,7% betrug.
Der Cashflow aus dem operativen Geschäft betrug 36,2 Millionen Dollar, wobei der tatsächliche Cashflow nach Anpassung für Lohnrückstellungen 27,0 Millionen Dollar betrug. Das Unternehmen hält eine starke Finanzlage mit 135,8 Millionen Dollar an Bargeld und handelbaren Wertpapieren sowie einer Kreditlinie von 500,0 Millionen Dollar.
Für die Zukunft erwartet HCSG ein Umsatzwachstum im mittleren einstelligen Bereich im Jahr 2025, wobei der Umsatz für das Q1 zwischen 440,0 und 450,0 Millionen Dollar prognostiziert wird. Das Unternehmen strebt an, die Kosten der Dienstleistungen im Bereich von 86% zu verwalten und die SG&A zwischen 8,5% und 9,5% zu halten. Der Cashflow aus dem operativen Geschäft wird für 2025 auf einen Bereich von 45,0 bis 60,0 Millionen Dollar geschätzt.
- Revenue increased to $437.8 million in Q4 2024 from $423.8 million in Q4 2023
- Projects mid-single digit revenue growth for 2025
- Strong liquidity position with $135.8 million in cash and marketable securities
- Maintains $500 million credit facility through November 2027
- Net income decreased to $11.9 million in Q4 2024 from $23.5 million in Q4 2023
- Operating margin declined to 4.6% in Q4 2024 from 9.1% in Q4 2023
- Cost of services increased to 86.6% of revenue
- SG&A remains elevated at 10.1% of revenue, above target range of 8.5-9.5%
Insights
The Q4 2024 results reveal HCSG's strategic pivot from recovery to growth, marked by several key developments. The 86.6% cost of services ratio, while elevated due to new business start-up costs, demonstrates management's operational discipline with a clear path to optimization in 2025. The company's segment performance shows particular strength in Housekeeping & Laundry with a
The robust liquidity position, including
Management's 2025 guidance suggests confidence in sustainable growth, with projected cash flow from operations of
Delivers Strong Earnings & Cash Flow,
Provides 2025 Growth Expectations
-
Revenue of
$437.8 million
-
Net income and diluted EPS of
$11.9 million $0.16
-
Reported cash flow from operations of
$36.2 million $27.0 million
-
Expects mid-single digit revenue growth in 2025 and Q1 revenue in the range of
$440.0 $450.0 million
-
Expects 2025 actual cash flow from operations, excluding the change in payroll accrual, in the range of
$45.0 $60.0 million
Ted Wahl, Chief Executive Officer, stated, “2024 was a transitional year for HCSG, as it marked a pivotal shift from recovery to renewed growth. This shift was highlighted by our Q4 results and the positive momentum we’re carrying into the new year. Looking ahead, we are confident that continuing to execute on our strategic priorities, supported by our strong business fundamentals, will enable us to further accelerate growth, enhance profitability, and maximize cash flow through 2025 and beyond.”
Fourth Quarter Results
-
Revenue was reported at
$437.8 million -
Housekeeping & laundry and dining & nutrition segment revenues and margins were
$192.7 million 10.2% and$245.1 million 4.7% , respectively. -
The Company expects mid-single digit revenue growth in 2025 and Q1 revenue in the range of
$440.0 $450.0 million
-
Housekeeping & laundry and dining & nutrition segment revenues and margins were
-
Cost of services was reported at
$379.2 million 86.6% , inclusive of new business start-up costs.-
The Company’s 2025 goal is to manage cost of services in the
86% range.
-
The Company’s 2025 goal is to manage cost of services in the
-
SG&A was reported at
$44.8 million $0.4 million $44.4 million 10.1% , inclusive of new business start-up costs.-
The Company’s 2025 goal is to manage SG&A into the
8.5% to9.5% range.
-
The Company’s 2025 goal is to manage SG&A into the
-
Net income and diluted EPS were reported at
$11.9 million $0.16 -
Cash flow from operations was reported at
$36.2 million $9.2 million $27.0 million -
The Company estimates 2025 actual cash flow from operations, excluding the change in payroll accrual, in the range of
$45.0 $60.0 million
-
The Company estimates 2025 actual cash flow from operations, excluding the change in payroll accrual, in the range of
Balance Sheet and Liquidity
The Company’s primary sources of liquidity are cash flow from operating activities, cash and cash equivalents, and its revolving credit facility. As of the end of the fourth quarter, the Company had cash and marketable securities of
Since the February 2023 share repurchase authorization, the Company has repurchased over
Conference Call and Upcoming Events
The Company will host a conference call on Wednesday, February 12, 2025, at 8:30 a.m. Eastern Time to discuss its results for the three months ended December 31, 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.
The Company will be participating in Oppenheimer’s 35th Annual Healthcare MedTech & Services Conference, which will be conducted virtually on March 19, 2025.
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; credit and collection risks associated with the healthcare industry; the impact of bank failures; our claims experience related to workers’ compensation, general liability and auto 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 IA. “Risk Factors” in such Form 10K.
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 have been in the past and could in the future 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 provided by 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 (Unaudited) (in thousands, except per share data) |
|||||||||||
|
For the Three Months Ended |
|
For the Year Ended |
||||||||
|
December 31, |
|
December 31, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Revenue |
$ |
437,812 |
|
$ |
423,840 |
|
$ |
1,715,682 |
|
$ |
1,671,389 |
Operating costs and expenses: |
|
|
|
|
|
|
|
||||
Cost of services |
|
379,209 |
|
|
349,124 |
|
|
1,487,592 |
|
|
1,456,643 |
Selling, general and administrative |
|
44,824 |
|
|
46,249 |
|
|
183,060 |
|
|
166,772 |
Income from operations |
|
13,779 |
|
|
28,467 |
|
|
45,030 |
|
|
47,974 |
Other income, net |
|
1,026 |
|
|
3,833 |
|
|
7,911 |
|
|
5,082 |
Income before income taxes |
|
14,805 |
|
|
32,300 |
|
|
52,941 |
|
|
53,056 |
|
|
|
|
|
|
|
|
||||
Income tax provision |
|
2,885 |
|
|
8,792 |
|
|
13,470 |
|
|
14,670 |
Net income |
$ |
11,920 |
|
$ |
23,508 |
|
$ |
39,471 |
|
$ |
38,386 |
|
|
|
|
|
|
|
|
||||
Basic earnings per common share |
$ |
0.16 |
|
$ |
0.32 |
|
$ |
0.54 |
|
$ |
0.52 |
|
|
|
|
|
|
|
|
||||
Diluted earnings per common share |
$ |
0.16 |
|
$ |
0.32 |
|
$ |
0.53 |
|
$ |
0.52 |
|
|
|
|
|
|
|
|
||||
Basic weighted average number of common shares outstanding |
|
73,553 |
|
|
73,817 |
|
|
73,754 |
|
|
74,288 |
|
|
|
|
|
|
|
|
||||
Diluted weighted average number of common shares outstanding |
|
73,934 |
|
|
73,879 |
|
|
73,988 |
|
|
74,340 |
HEALTHCARE SERVICES GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) |
|||||
|
December 31, 2024 |
|
December 31, 2023 |
||
Cash and cash equivalents |
$ |
56,776 |
|
$ |
54,330 |
Restricted cash equivalents |
|
3,355 |
|
|
— |
Marketable securities, at fair value |
|
50,535 |
|
|
93,131 |
Restricted marketable securities, at fair value |
|
25,105 |
|
|
— |
Accounts receivable, net |
|
330,907 |
|
|
344,864 |
Notes receivable, net |
|
51,429 |
|
|
38,645 |
Other current assets |
|
38,545 |
|
|
40,726 |
Total current assets |
|
556,652 |
|
|
571,696 |
|
|
|
|
||
Property and equipment, net |
|
28,198 |
|
|
28,774 |
Notes receivable — long-term, net |
|
41,054 |
|
|
24,832 |
Goodwill |
|
75,529 |
|
|
75,529 |
Other intangible assets, net |
|
9,442 |
|
|
12,127 |
Deferred compensation funding |
|
49,639 |
|
|
40,812 |
Other assets |
|
42,258 |
|
|
36,882 |
Total assets |
$ |
802,772 |
|
$ |
790,652 |
|
|
|
|
||
Accrued insurance claims — current |
$ |
25,148 |
|
$ |
22,681 |
Other current liabilities |
|
167,399 |
|
|
194,247 |
Total current liabilities |
|
192,547 |
|
|
216,928 |
|
|
|
|
||
Accrued insurance claims — long-term |
|
51,869 |
|
|
61,697 |
Deferred compensation liability — long-term |
|
50,011 |
|
|
41,186 |
Lease liability — long-term |
|
8,033 |
|
|
11,235 |
Other long-term liabilities |
|
385 |
|
|
2,990 |
|
|
|
|
||
Stockholders’ equity |
|
499,927 |
|
|
456,616 |
Total liabilities and stockholders’ equity |
$ |
802,772 |
|
$ |
790,652 |
HEALTHCARE SERVICES GROUP, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (Unaudited) |
||||||||||||||||
Reconciliation of GAAP net income to EBITDA and adjusted EBITDA (in thousands) |
|
For the Three Months Ended |
|
For the Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
GAAP net income |
|
$ |
11,920 |
|
|
$ |
23,508 |
|
|
$ |
39,471 |
|
|
$ |
38,386 |
|
Income tax provision |
|
|
2,885 |
|
|
|
8,792 |
|
|
|
13,470 |
|
|
|
14,670 |
|
Interest, net |
|
|
(555 |
) |
|
|
509 |
|
|
|
(424 |
) |
|
|
1,629 |
|
Depreciation and amortization1 |
|
|
3,602 |
|
|
|
3,779 |
|
|
|
14,585 |
|
|
|
14,344 |
|
EBITDA |
|
$ |
17,852 |
|
|
$ |
36,588 |
|
|
$ |
67,102 |
|
|
$ |
69,029 |
|
Share-based compensation |
|
|
2,337 |
|
|
|
2,192 |
|
|
|
9,165 |
|
|
|
8,985 |
|
(Gain)/loss on deferred compensation, net2 |
|
|
(12 |
) |
|
|
(28 |
) |
|
|
(52 |
) |
|
|
39 |
|
Adjusted EBITDA |
|
$ |
20,177 |
|
|
$ |
38,752 |
|
|
$ |
76,215 |
|
|
$ |
78,053 |
|
Adjusted EBITDA as a percentage of revenue |
|
|
4.6 |
% |
|
|
9.1 |
% |
|
|
4.4 |
% |
|
|
4.7 |
% |
Reconciliation of GAAP cash flows provided by operations to adjusted cash flows provided by operations (in thousands) |
|
For the Three Months Ended |
|
For the Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
|||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||
GAAP cash flows provided by operations |
|
$ |
36,204 |
|
|
$ |
49,445 |
|
|
$ |
30,802 |
$ |
43,498 |
|
||
Accrued payroll3 |
|
|
(9,247 |
) |
|
|
(21,563 |
) |
|
|
3,573 |
|
(4,186 |
) |
||
Adjusted cash flows provided by operations |
|
$ |
26,957 |
|
|
$ |
27,882 |
|
|
$ |
34,375 |
$ |
39,312 |
|
||
1. |
Includes right-of-use asset depreciation of |
2. |
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, |
3. |
The accrued payroll adjustment reflects changes in accrued payroll for the three and twelve months ended December 31, 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/20250212259240/en/
Theodore Wahl
President and Chief Executive Officer
Vikas Singh
Executive Vice President and Chief Financial Officer
Matthew J.
Chief Communications Officer
215-639-4274
investor-relations@hcsgcorp.com
Source: Healthcare Services Group, Inc.
FAQ
What was HCSG's revenue and EPS for Q4 2024?
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What are HCSG's cost management targets for 2025?
