BENSALEM, PA -- (MARKET WIRE) -- 04/12/11 --
Healthcare Services Group, Inc. (NASDAQ: HCSG)
reported that revenues for the three months ended March 31, 2011 increased
over 13% to $208,390,000 compared to $183,801,000 for the same 2010 period.
Net income for the three months ended March 31, 2011 increased to
$7,767,000 or $.12 per basic and per diluted common share, compared to the
2010 first quarter net income of $7,428,000 or $.11 per basic and per
diluted common share.
Additionally, our Board of Directors declared a regular quarterly cash
dividend of $.1575 per common share, payable on May 13, 2011 to
shareholders of record at the close of business April 22, 2011. This
represents an increase of 7% over the dividend declared for the same 2010
period payment. It is the 32nd consecutive regular quarterly cash dividend
payment, as well as the 31st consecutive increase since our initiation of
regular quarterly cash dividend payments in 2003.
The Company will host a conference call on Wednesday, April 13, 2011 at
8:30 AM Eastern Time to discuss its results for the three month period
ended March 31, 2011. The call in numbers will be 800-580-5706 and
913-981-5575. Passcode # 6685660.
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 (the "Exchange Act"), as amended, which are not
historical facts but rather are based on current expectations, estimates
and projections about our business and industry, 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; credit
and collection risks associated with this industry; one client accounting
for approximately 10% of revenues in the three month period ended March 31,
2011; 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 the risk factors described in our Form 10-K
filed with the Securities and Exchange Commission for the year ended
December 31, 2010 in Part I thereof under "Government Regulation of
Clients," "Competition" and "Service Agreements/Collections," and under
Item IA "Risk Factors." Many of our clients' revenues are highly contingent
on Medicare and Medicaid reimbursement funding rates, which Congress has
affected through the enactment of a number of major laws during the past
decade, most recently the March 2010 enactment of the Patient Protection
and Affordable Care Act and the Health Care and Education Reconciliation
Act of 2010. Currently, the U.S. Congress is considering further changes or
revising legislation relating to health care in the United States which,
among other initiatives, may impose cost containment measures impacting our
clients. These laws and proposed laws and forthcoming regulations have
significantly altered, or threaten to alter, overall government
reimbursement funding rates and mechanisms. The overall effect of these
laws and trends in the long-term care industry has affected and could
adversely affect the liquidity of our clients, resulting in their inability
to make payments to us on agreed upon payment terms. These factors, in
addition to delays in payments from clients, 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, 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
successfully executing 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 facilities.
HEALTHCARE SERVICES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2011 2010
------------- -------------
Cash and cash equivalents $ 36,692,000 $ 39,692,000
Marketable securities, net 41,199,000 43,437,000
Accounts receivable, net 111,364,000 108,426,000
Other current assets 27,369,000 30,220,000
Total current assets 216,624,000 221,775,000
Property and equipment, net 7,592,000 6,656,000
Notes receivable- long term, net 4,931,000 5,055,000
Goodwill, net 16,955,000 16,955,000
Other Intangible Assets, net 6,794,000 7,262,000
Deferred compensation funding 12,948,000 12,080,000
Other assets 8,467,000 8,151,000
------------- -------------
Total Assets $ 274,311,000 $ 277,934,000
============= =============
Accrued insurance claims- current $ 5,634,000 $ 5,076,000
Other current liabilities 28,819,000 35,455,000
------------- -------------
Total current liabilities 34,453,000 40,531,000
Accrued insurance claims- long term 13,147,000 11,845,000
Deferred compensation liability 13,094,000 12,479,000
Stockholders' equity 213,617,000 213,079,000
------------- -------------
Total Liabilities and Stockholders' Equity $ 274,311,000 $ 277,934,000
============= =============
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
March 31,
2011 2010
------------- -------------
Revenues $ 208,390,000 $ 183,801,000
Operating costs and expenses:
Cost of services provided 179,985,000 158,573,000
Selling, general and administrative 16,780,000 13,901,000
------------- -------------
Income from operations 11,625,000 11,327,000
Other income:
Investment and interest 714,000 750,000
------------- -------------
Income before income taxes 12,339,000 12,077,000
Income taxes 4,572,000 4,649,000
------------- -------------
Net income $ 7,767,000 $ 7,428,000
============= =============
Basic earnings per common share $ .12 $ .11
============= =============
Diluted earnings per common share $ .12 $ .11
============= =============
Cash dividends per common share $ .16 $ .14
============= =============
Basic weighted average number of common shares
outstanding 66,401,000 65,849,000
============= =============
Diluted weighted average number of common shares
outstanding 67,454,000 66,989,000
============= =============
Company Contact:
Daniel P. McCartney
Chairman and Chief Executive Officer
215-639-4274
Source: Healthcare Services Group, Inc
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