HCSG Files Q2 2024 10-Q Report

Ticker: HCSG · Form: 10-Q · Filed: Jul 26, 2024 · CIK: 731012

Sentiment: neutral

Topics: 10-Q, financials, healthcare

TL;DR

HCSG dropped its Q2 2024 10-Q. Check financials.

AI Summary

Healthcare Services Group Inc. (HCSG) filed its 10-Q for the period ending June 30, 2024. The filing covers the second quarter of 2024 and provides financial details for the company. Key financial data and operational information are presented for the reporting period.

Why It Matters

This filing provides investors with the latest financial performance and operational status of Healthcare Services Group Inc., crucial for understanding the company's current health and future prospects.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags or significant new risks highlighted.

Key Players & Entities

FAQ

What is the reporting period for this 10-Q filing?

The Conformed Period of Report is 20240630, indicating the filing covers the period ending June 30, 2024.

When was this 10-Q filed?

The filing date is 20240726.

What is the company's primary business classification?

The Standard Industrial Classification is SERVICES-NURSING & PERSONAL CARE FACILITIES [8050].

Where is Healthcare Services Group Inc. headquartered?

The company's business address is in BENSALEM, PA, with a ZIP code of 19020.

What is the SEC file number for this company?

The SEC File Number is 000-12015.

Filing Stats: 4,592 words · 18 min read · ~15 pages · Grade level 17.4 · Accepted 2024-07-26 16:08:00

Key Financial Figures

Filing Documents

Financial Statements (Unaudited)

Financial Statements (Unaudited) 1 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 39 Item 4.

Controls and Procedures

Controls and Procedures 39 PART II Item 1.

Legal Proceedings

Legal Proceedings 41 Item 1A.

Risk Factors

Risk Factors 41 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 41 Item 3. Defaults Upon Senior Securities 41 Item 4. Mine Safety Disclosures 41 Item 5. Other Information 41 Item 6. Exhibits 42

SIGNATURES

SIGNATURES 43 Table of Contents CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report and documents 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; the impact of and future effects of the COVID-19 pandemic or other potential pandemics; having a significant portion of our consolidated revenues contributed by one customer during the six months ended June 30, 2024; credit and collection risks associated with the healthcare industry; the impact of bank failures; our claims experience related to workers' compensation and general liability insurance (including any litigation claims, enforcement actions, regulatory actions and investigations arising from personal injury and loss of life related to COVID-19); 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 expectat

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) Healthcare Services Group, Inc. Consolidated Balance Sheets (in thousands, except per share amounts) June 30, 2024 December 31, 2023 ASSETS: (unaudited) Current assets: Cash and cash equivalents $ 26,430 $ 54,330 Restricted cash equivalents 3,117 — Marketable securities, at fair value 79,134 93,131 Restricted marketable securities, at fair value 22,022 — Accounts and notes receivable, less allowance for doubtful accounts of $ 112,133 and $ 87,250 as of June 30, 2024 and December 31, 2023, respectively 398,884 383,509 Inventories and supplies 17,857 18,479 Prepaid expenses and other assets 25,768 22,247 Total current assets 573,212 571,696 Property and equipment, net 29,840 28,774 Goodwill 75,529 75,529 Other intangible assets, less accumulated amortization of $ 37,899 and $ 36,557 as of June 30, 2024 and December 31, 2023, respectively 10,785 12,127 Notes receivable — long–term portion, less allowance for doubtful accounts of $ 3,152 and $ 4,449 as of June 30, 2024 and December 31, 2023, respectively 20,871 24,832 Deferred compensation funding, at fair value 46,043 40,812 Deferred tax assets 38,917 35,226 Other long-term assets 4,505 1,656 Total assets $ 799,702 $ 790,652 LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 72,220 $ 83,224 Accrued payroll and related taxes 57,014 56,142 Other accrued expenses and current liabilities 22,987 21,179 Borrowings under line of credit 30,000 25,000 Income taxes payable 4,279 7,201 Deferred compensation liability — short-term 1,390 1,501 Accrued insurance claims 21,593 22,681 Total current liabilities 209,483 216,928 Accrued insurance claims — long-term 61,209 61,697 Deferred compensation liability — long-term 46,201 41,186 Lease liability — long-term 10,662 11,235 Other long-term liabilities 724 2,990 Commitments and contingencies (Note 15) STOCKHOLDERS' EQUITY: Common stock, $ 0.01 par value; 200,000 shares aut

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements (Unaudited) Note 1—Description of Business and Significant Accounting Policies Nature of Operations Healthcare Services Group, Inc. (the "Company") provides management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments predominantly to clients within the healthcare industry, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. Although the Company does not directly participate in any government reimbursement programs, the Company's customers receive government reimbursements related to Medicare and Medicaid. Therefore, the Company's customers are directly affected by any legislation relating to Medicare and Medicaid reimbursement programs. The Company provides services primarily pursuant to full service agreements with its customers. In such agreements, the Company is responsible for the day-to-day management of its employees located at the customers' facilities, as well as for the provision of certain supplies. The Company also provides services on the basis of management-only agreements for a limited number of customers. In a management-only agreement, the Company provides management and supervisory services while the customer facility retains payroll responsibility for the non-supervisory staff. The agreements with customers typically provide for a renewable one year service term, cancellable by either party upon 30 to 90 days' notice after an initial period of 60 to 120 days. The Company is organized into two reportable segments: housekeeping, laundry, linen and other services ("Housekeeping"), and dietary department services ("Dietary"). Housekeeping consists of managing the customers' housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of a customer's facility

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