Healthcare Services Group, Inc. Reports Results for the Three and Six Months Ended June 30, 2015 & Increases Second Quarter 2015 Cash Dividend

July 14, 2015

BENSALEM, Pa., July 14, 2015 (GLOBE NEWSWIRE) -- Healthcare Services Group, Inc. (NASDAQ:HCSG) reported that revenues for the three months ended June 30, 2015 increased over 11% to $355,356,000 compared to $319,295,000 for the same 2014 period. Net income for the three months ended June 30, 2015 was $16,288,000 or $0.23 per basic and per diluted common share, compared to the three months ended June 30, 2014 net income of $13,921,000 or $0.20 per basic and per diluted common share.

Revenues for the six months ended June 30, 2015 increased approximately 13% to $710,602,000 compared to $631,460,000 for the same 2014 period. Net income for the six months ended June 30, 2015 was $31,804,000 or $0.44 per basic and per diluted common share, compared to the six months ended June 30, 2014 net income of $28,560,000 or $0.41 per basic and $0.40 per diluted common share.

Additionally, our Board of Directors declared a quarterly cash dividend of $0.17875 per common share, payable on September 25, 2015 to shareholders of record at the close of business on August 21, 2015. This represents the 49th consecutive quarterly cash dividend payment, as well as the 48th consecutive increase since our initiation of quarterly cash dividend payments in 2003.

The Company will host a conference call on Wednesday, July 15, 2015 at 8:30 a.m. Eastern Time to discuss its results for the three and six months ended June 30, 2015. 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, A replay of the webcast will also be available on our website through approximately 10:00 p.m. Eastern Time on Wednesday, July 15th.

The Company also announced that it will participate in several conferences, including the CL King 13th Annual Best Ideas Conference on September 10th at the Omni Berkshire Place in New York City and the 6th Annual Credit Suisse SMID Conference on September 16th at the Waldorf Astoria New York.

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; having several significant clients who each individually contributed at least 3% with one as high as 9% of our total consolidated revenues for the three and six months ended June 30, 2015; 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 receipt of tax benefits arising from our corporate reorganization and self-funded health insurance program transition; risks associated with the reorganization of our corporate structure; and the risk factors described in our Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2014 in Part I thereof under ''Government Regulation of Clients," ''Competition'' and ''Service Agreements/Collections," and under Item IA "Risk Factors".

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 health care facilities.


 For the Three Months Ended For the Six Months Ended
 June 30, June 30,
 2015 2014  2015 2014
Revenues$355,356,000  $319,295,000  $710,602,000  $631,460,000 
Operating costs and expenses:       
  Cost of services provided304,217,000  275,815,000  608,153,000  543,186,000 
  Selling, general and administrative25,124,000  22,240,000  51,887,000  44,286,000 
Income from operations26,015,000  21,240,000  50,562,000  43,988,000 
Other income:       
  Investment and interest242,000  803,000  749,000  1,184,000 
Income before income taxes26,257,000  22,043,000  51,311,000  45,172,000 
Income taxes9,969,000  8,122,000  19,507,000  16,612,000 
Net income$ 16,288,000  $13,921,000  $31,804,000  $28,560,000 
Basic earnings per common share$0.23  $0.20  $0.44  $0.41 
Diluted earnings per common share$0.23   $0.20  $0.44  $0.40 
Cash dividends per common share$0.18  $0.17  $0.36  $0.34 
Basic weighted average number of common shares outstanding71,657,000  70,440,000  71,563,000  70,381,000 
Diluted weighted average number of common shares outstanding72,286,000  71,206,000  72,223,000  71,140,000 


 June 30, 2015 December 31, 2014
Cash and cash equivalents$85,900,000  $75,280,000 
Marketable securities, at fair value11,799,000  11,799,000 
Accounts and notes receivable, net205,048,000  198,128,000 
Other current assets49,505,000  49,621,000 
  Total current assets352,252,000  334,828,000 
Property and equipment, net12,785,000  12,772,000 
Notes receivable - long term3,463,000  5,179,000 
Goodwill44,438,000  44,438,000 
Other intangible assets, net18,729,000  20,349,000 
Deferred compensation funding24,985,000  24,742,000 
Other assets30,082,000  27,271,000 
Total Assets$486,734,000  $469,579,000 
Accrued insurance claims - current$17,908,000  $17,748,000 
Other current liabilities95,987,000  100,211,000 
  Total current liabilities113,895,000  117,959,000 
Accrued insurance claims - long term56,708,000  50,514,000 
Deferred compensation liability25,252,000  25,276,000 
Stockholders' equity290,879,000  275,830,000 
Total Liabilities and Stockholders' Equity$486,734,000  $469,579,000 



Company Contacts:

Daniel P. McCartney


Theodore WahlPresident and Chief Executive Officer

Matthew J. McKee

Vice President of Strategy

Healthcare Services Group, Inc.

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