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Healthcare Services Group, Inc. Reports Results for the Three Months and Year Ended December 31, 2015


BENSALEM, Pa., Feb. 02, 2016 (GLOBE NEWSWIRE) -- Healthcare Services Group, Inc. (NASDAQ:HCSG) reported that revenues for the three months ended December 31, 2015 increased to $366,082,000 compared to $341,624,000 for the same 2014 period. Revenues for the year ended December 31, 2015 increased to $1,436,849,000 compared to $1,293,183,000 for the same 2014 period.

Inclusive of the previously announced settlement costs, net income for the three months ended December 31, 2015 was $9,134,000 or $0.13 per basic and per diluted common share.  Net income for the year ended December 31, 2015 was $58,024,000 or $0.81 per basic and $0.80 per diluted common share.

As previously announced, on January 26th our Board of Directors declared a quarterly cash dividend of $0.18125 per common share, payable on March 25, 2016 to shareholders of record at the close of business on February 19, 2016. This represents the 51st consecutive quarterly cash dividend payment, as well as the 50th consecutive increase since our initiation of quarterly cash dividend payments in 2003.  The Company also reported that it continued its strong top line momentum from 2015 and entered into new service agreements, to be phased in during the first quarter of 2016, with annual revenues of over $70 million.

The Company will host a conference call on Wednesday, February 3, 2016 at 8:30 a.m. Eastern Time to discuss its results for the three months and year ended December 31, 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, February 3rd.

The Company also announced that it will present at the RBC Capital Markets Global Healthcare Conference on February 24th at the New York Palace Hotel in New York City.

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; from having several significant clients who each individually contributed at least 3% with one as high as 9% of our total consolidated revenues for the year ended December 31, 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; tax benefits arising from our corporate reorganization and self-funded health insurance program transition; risks associated with the reorganization of our corporate structure; perceived or real risks related to the food industry; 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
December 31,
  For the Twelve Months Ended
December 31,
   2015   2014   2015   2014 
Revenues $  366,082,000  $  341,624,000  $  1,436,849,000  $  1,293,183,000 
Operating costs and expenses:        
Costs of services provided    319,310,000     296,350,000     1,236,108,000     1,155,293,000 
Selling, general and administrative    36,357,000     24,149,000     111,689,000     107,810,000 
Income from operations    10,415,000     21,125,000     89,052,000     30,080,000 
Other income:        
Investment and interest    1,297,000     494,000     712,000     1,628,000 
Income before income taxes     11,712,000     21,619,000     89,764,000     31,708,000 
Income taxes     2,578,000     6,147,000     31,740,000     9,858,000 
Net income $  9,134,000  $  15,472,000  $  58,024,000  $  21,850,000 
Basic earnings per common share $  0.13  $  0.22  $  0.81  $  0.31 
Diluted earnings per common share $  0.13  $  0.22  $  0.80  $  0.31 
Cash dividends per common share $  0.18  $  0.18  $  0.72  $  0.69 
Basic weighted average number of common shares outstanding    72,161,000     71,023,000     71,826,000     70,616,000 
Diluted weighted average number of common shares outstanding    72,903,000     71,722,000     72,512,000     71,341,000 

   December 31, 2015 December 31, 2014
Cash and cash equivalents $  33,189,000  $  75,280,000 
Marketable securities, at fair value    69,496,000      11,799,000 
Accounts and notes receivable, net    214,854,000      198,128,000 
Other current assets    48,407,000     49,621,000 
Total current assets    365,946,000     334,828,000 
Property and equipment, net    13,086,000     12,772,000 
Notes Receivable - long term, net    2,972,000     5,179,000 
Goodwill    44,438,000     44,438,000 
Other Intangible assets, net    17,108,000     20,349,000 
Deferred compensation funding    25,391,000     24,742,000 
Other assets    12,008,000     27,271,000 
Total Assets $  480,949,000   $  469,579,000 
Accrued insurance claims $  19,740,000  $  17,748,000 
Other current liabilities    76,325,000     100,211,000 
Total current liabilities    96,065,000     117,959,000 
Accrued insurance claims - long term     62,510,000     50,514,000 
Deferred compensation liability    25,918,000     25,276,000 
Stockholders' equity    296,456,000     275,830,000 
Total Liabilities and Stockholders' Equity  $  480,949,000   $  469,579,000 

Company Contacts:

Daniel P. McCartney


Theodore WahlPresident and Chief Executive Officer

Matthew J. McKee

Vice President of Strategy


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