Healthcare Services Group Inc
NASDAQ:HCSG
Healthcare Services Group Inc
Healthcare Services Group, Inc. engages in the provision of keeping, laundry, and dietary services to long-term care and related health care facilities. The company is headquartered in Bensalem, Pennsylvania and currently employs 39,200 full-time employees. The firm operates through two segments: housekeeping, laundry, linen and other services (Housekeeping), and dietary department services (Dietary). Its Housekeeping service involves the management of a customers’ housekeeping department, which is responsible for the cleaning, disinfecting and sanitizing resident rooms and common areas of a customers’ facilities. The firm's Dietary segment consist of managing the customers’ dietary department, which is responsible for food purchasing, meal preparation and providing professional dietitian services, including the development of menus that meet the dietary needs of residents.
Healthcare Services Group, Inc. engages in the provision of keeping, laundry, and dietary services to long-term care and related health care facilities. The company is headquartered in Bensalem, Pennsylvania and currently employs 39,200 full-time employees. The firm operates through two segments: housekeeping, laundry, linen and other services (Housekeeping), and dietary department services (Dietary). Its Housekeeping service involves the management of a customers’ housekeeping department, which is responsible for the cleaning, disinfecting and sanitizing resident rooms and common areas of a customers’ facilities. The firm's Dietary segment consist of managing the customers’ dietary department, which is responsible for food purchasing, meal preparation and providing professional dietitian services, including the development of menus that meet the dietary needs of residents.
Revenue Growth: HCSG reported third quarter revenue of $464.3 million, up 8.5% year-over-year, marking its highest growth rate since Q1 2018.
Profitability: Net income was $43 million and diluted EPS was $0.59, with a $0.36 per share benefit primarily from the Employee Retention Credit (ERC).
Cash Flow: Cash flow from operations was $71.3 million, or $87.1 million when adjusted for payroll accruals, buoyed by $31.8 million in ERC receipts.
Strong Client Retention: New client wins and high retention rates drove top-line growth, with the company seeing positive momentum across both Environmental and Dietary segments.
Guidance: Q4 revenue is projected between $460 million and $470 million, with management targeting mid-single-digit top-line growth beyond Q4.
Labor Market: Management reported stable wage growth, record application levels, and no labor shortages expected to impact growth.
Acquisitions & Buybacks: HCSG repurchased $27.3 million of stock in Q3 and is prioritizing acquisitions in the education ("campus") sector.
Genesis Healthcare Update: No disruptions in service or payment from Genesis facilities amid ongoing bankruptcy; business continues as usual for HCSG.
