Market Overview - The Middle East & Africa Pharmaceuticals Market was valued at USD 30.07 billion in 2024 and is projected to reach USD 42.42 billion by 2030, with a compound annual growth rate (CAGR) of 6.10% [2][11]. Key Market Drivers - The market growth is driven by the region's growing population, increasing prevalence of chronic diseases, and rising healthcare expenditure [2][3]. - The demand for pharmaceutical products is increasing due to the higher incidence of chronic diseases such as diabetes, cardiovascular disorders, and cancer [3]. - Government initiatives aimed at improving healthcare infrastructure and access further support market expansion [3]. Key Market Trends - Technological advancements and a shift towards personalized medicine are contributing to the market's growth, providing opportunities for pharmaceutical companies to innovate [3]. - Saudi Arabia emerged as the dominant country in the Middle East & Africa Pharmaceuticals market in 2024, driven by its strong economy and significant healthcare expenditure [4]. - The Vision 2030 initiative in Saudi Arabia emphasizes enhancing the healthcare sector through reforms and investments in healthcare infrastructure and digital health technologies [5]. Key Players - Notable companies in the Middle East & Africa Pharmaceuticals Market include Julphar, Bayer Middle East FZE, Niner Pharmaceuticals LLC, Pfizer Gulf FZ-LLC, Novo Nordisk Pharma Gulf FZ LLC, Roche Pharmaceutical Middle East FZCO, AstraZeneca FZ LLC, Hikma UAE, Merck Serono Middle East Fz-Ltd., and Abbott Laboratories SA [8][12]. Market Segmentation - The report segments the market by drug type, product type, application, distribution channel, and country [9][10].

Revenue Performance - Consolidated revenues increased by 4.1% to $428.1 million for the three months ended September 30, 2024, compared to $411.4 million for the same period in 2023[144]. - Consolidated revenues increased to $1,277.9 million for the nine months ended September 30, 2024, compared to $1,247.5 million for the same period in 2023, representing a 2.4% increase[162]. - Housekeeping revenues increased by 0.1% to $191.1 million, while Dietary revenues increased by 7.5% to $237.0 million for the three months ended September 30, 2024[140][145]. - Dietary revenues increased by 4.9% to $705.2 million, while Housekeeping revenues decreased by 0.5% to $572.7 million during the nine months ended September 30, 2024[159][163]. Cost Management - Consolidated costs of services provided decreased by 3.2% to $364.7 million for the three months ended September 30, 2024, compared to $376.9 million for the same period in 2023[146]. - Consolidated costs of services provided increased by 0.1% to $1,108.4 million for the nine months ended September 30, 2024, compared to $1,107.5 million for the same period in 2023[164]. - Costs of services provided for Housekeeping decreased to 93.6% of Housekeeping revenues, while Dietary costs decreased to 94.7% of Dietary revenues for the three months ended September 30, 2024[148]. - Housekeeping costs as a percentage of Housekeeping revenues were 91.7% for the nine months ended September 30, 2024, compared to 91.8% for the same period in 2023[167]. - Dietary costs as a percentage of Dietary revenues decreased to 93.6% for the nine months ended September 30, 2024, from 95.7% in the corresponding period in 2023[167]. Expenses - Selling, general and administrative expenses increased by 20.1% to $46.9 million for the three months ended September 30, 2024, compared to $39.0 million for the same period in 2023[150][152]. - Selling, general and administrative expenses increased by 14.7% to $138.2 million for the nine months ended September 30, 2024, compared to $120.5 million for the same period in 2023[169]. Income and Taxation - Investment and other income, net was a gain of $3.8 million for the three months ended September 30, 2024, compared to a gain of $0.4 million in the corresponding 2023 period[153]. - Investment and other income, net was a gain of $12.1 million for the nine months ended September 30, 2024, compared to a gain of $7.0 million for the same period in 2023, reflecting a 72.3% increase[172]. - The effective tax rate for the three months ended September 30, 2024, was 25.4%, compared to a benefit of 20.3% for the same period in 2023[156]. - For the nine months ended September 30, 2024, the company recognized a provision for income taxes of $10.6 million, with a 27.8% effective tax rate, compared to $5.9 million and a 28.3% effective tax rate for the same period in 2023[174]. Financial Position - As of September 30, 2024, the company had cash, cash equivalents, and marketable securities totaling $103.8 million, down from $147.5 million at December 31, 2023, while working capital increased to $380.9 million from $354.8 million[175]. - The company reported net cash used in operating activities of $(5,402) thousand for the nine months ended September 30, 2024, compared to $(5,947) thousand for the same period in 2023[176]. - The company had a $300 million bank line of credit, with $25 million drawn as of September 30, 2024, and maintained a funded debt to EBITDA ratio of 0.63, well below the 3.50 covenant requirement[181]. - The company expects to remain in compliance with its financial covenants and believes existing liquidity will be adequate for future operational needs[182]. Operational Insights - The company provided services to approximately 2,600 facilities throughout the continental United States as of September 30, 2024[134]. - The bad debt provision as a percentage of consolidated revenues was 0.0% for the three months ended September 30, 2024, compared to 3.4% in the same period in 2023[147]. - Bad debt provision increased to 2.9% of consolidated revenues for the nine months ended September 30, 2024, compared to 2.6% for the same period in 2023, due to the Chapter 11 bankruptcy of LaVie[165]. Capital Expenditures and Share Repurchase - Capital expenditures for 2024 are estimated to be between $5.0 million and $7.0 million, with $4.9 million spent through September 30, 2024[183]. - The company repurchased 0.4 million shares of common stock for $4.0 million during the nine months ended September 30, 2024, compared to 0.5 million shares for $6.2 million in the same period of 2023[180]. Internal Controls and Legal Proceedings - The company identified a material weakness in internal controls related to accrued payroll liabilities, which has since been remediated[192]. - The company is involved in various legal proceedings but does not anticipate any material adverse effects on its consolidated financial condition or liquidity[197].

Core Viewpoint - Healthcare Services (HCSG) reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, and showing an increase from $0.17 per share a year ago, indicating a positive earnings surprise of 18.75% [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates in all four of the last quarters [1] - The revenue for the quarter ended September 2024 was $428.15 million, slightly missing the Zacks Consensus Estimate by 0.20%, but up from $411.39 million year-over-year [1] - Over the last four quarters, the company has topped consensus revenue estimates two times [1] Group 2: Stock Performance and Outlook - Healthcare Services shares have declined approximately 0.8% since the beginning of the year, contrasting with the S&P 500's gain of 22.7% [2] - The future stock price movement will largely depend on management's commentary during the earnings call and the company's earnings outlook [2][3] Group 3: Estimate Revisions and Industry Context - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $436.2 million, and for the current fiscal year, it is $0.56 on revenues of $1.71 billion [4] - The Zacks Industry Rank places the Business - Services sector in the bottom 35% of over 250 Zacks industries, indicating potential challenges for stock performance [5] - Another company in the same industry, SPS Commerce, is expected to report earnings of $0.83 per share, reflecting a year-over-year increase of 10.7% [5]

Exhibit 99.1 HCSG Reports Q3 2024 Results Delivers QoQ and YoY Growth In Revenue, Earnings and Cash Flow • Revenue of $428.1 million, in line with expectations. • Net income and diluted EPS of $14.0 million and $0.19. • Reported and adjusted cash flow from operations of $4.3 million and $19.0 million. • Reaffirms Q4 revenue estimate of $430.0 to $440.0 million and FY 2024 cash flow forecast of $40.0 to $55.0 million. BENSALEM, PA--(BUSINESS WIRE)-- Healthcare Services Group, Inc. (NASDAQ:HCSG) today reporte ...

| --- | --- | --- | --- | --- | --- | |-----------------------------------------------------------------------------------------------------------|----------------------------|-----------------------------------------------------------|------------------------------------|----------------------|------------| | The following table summarizes information about the SERP during the \n1 SERP expense | six months ended \n$ | June 30, 2024 \nSix Months \n2024 \n(in \n355 | and \n Ended \nthousands) \n $ | 2023: \n ...

HCSG Reports Q2 2024 Results Raises Second Half 2024 Revenue Estimates, Reaffirms Full-Year 2024 Cash Flow Forecast Exhibit 99.1 Ted Wahl, Chief Executive Officer, stated, "Our field-based team delivered strong service execution leading to another successful quarter of managing cost of services, excluding CECL, within our targeted range. Additionally, we achieved over 96% cash collections during the quarter, which, while short of our target, showed improvement compared to last quarter and the same period la ...

PART I - FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements as of March 31, 2024, detail the company's financial position and performance Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total current assets** | $580,414 | $571,696 | | **Total assets** | $803,880 | $790,652 | | **Total current liabilities** | $209,375 | $216,928 | | **Total liabilities** | $329,299 | $334,036 | | **Total stockholders' equity** | $474,581 | $456,616 | Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Revenues** | $423,433 | $417,230 | | **Income before income taxes** | $21,314 | $16,155 | | **Net income** | $15,309 | $11,671 | | **Diluted earnings per common share** | $0.21 | $0.16 | Consolidated Cash Flow Highlights (in thousands) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(26,033) | $(16,290) | | **Net cash from (used in) investing activities** | $11,716 | $(743) | | **Net cash from financing activities** | $13,970 | $6,907 | | **Net decrease in cash** | $(347) | $(10,126) | [Note 1: Business Description and Accounting Policies](index=10&type=section&id=Note%201%E2%80%94Description%20of%20Business%20and%20Significant%20Accounting%20Policies) The company provides housekeeping and dietary services to the healthcare industry through two reportable segments - The company is organized into two reportable segments: **Housekeeping** (housekeeping, laundry, linen) and **Dietary** (food purchasing, meal preparation, dietitian services)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - For Q1 2024, a single customer, Genesis Healthcare, Inc, accounted for **9.2% of consolidated revenues ($38.8 million)**, down from 11.5% ($48.1 million) in Q1 2023[48](index=48&type=chunk) - The company has filed for the Employee Retention Credit (ERC) but has **not recognized any related amounts** in its financial statements due to uncertainty of receipt[50](index=50&type=chunk) [Note 3: Revenue](index=16&type=section&id=Note%203%E2%80%94Revenue) Revenue is disaggregated by the Dietary (55.0%) and Housekeeping (45.0%) segments and recognized over time Revenue by Segment (in millions) | Segment | Q1 2024 Revenue | % of Total | Q1 2023 Revenue | % of Total | | :--- | :--- | :--- | :--- | :--- | | Housekeeping | $190.6 | 45.0% | $193.5 | 46.4% | | Dietary | $232.9 | 55.0% | $223.7 | 53.6% | - Revenue is recognized using the output method based on the delivery of goods and services, with contracts typically for a renewable one-year term[59](index=59&type=chunk) [Note 5: Allowance for Doubtful Accounts](index=18&type=section&id=Note%205%E2%80%94Allowance%20for%20Doubtful%20Accounts) The allowance for doubtful accounts increased to $95.6 million due to a bad debt expense of $4.9 million in Q1 2024 Changes in Allowance for Doubtful Accounts (in thousands) | Portfolio Segment | Dec 31, 2023 Balance | Bad Debt Expense Q1 2024 | Write-Offs Q1 2024 | March 31, 2024 Balance | | :--- | :--- | :--- | :--- | :--- | | Accounts receivable | $80,819 | $4,301 | $(1,033) | $84,087 | | Notes receivable | $10,880 | $620 | $0 | $11,500 | | **Total** | **$91,699** | **$4,921** | **$(1,033)** | **$95,587** | - The company evaluates receivables for expected credit losses quarterly using internally developed credit quality indicators[66](index=66&type=chunk) [Note 13: Segment Information](index=31&type=section&id=Note%2013%E2%80%94Segment%20Information) Dietary segment revenue and income grew in Q1 2024, while the Housekeeping segment experienced declines Segment Financial Performance (in thousands) | Metric | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | :--- | | **Revenues** | Housekeeping | $190,559 | $193,519 | | | Dietary | $232,874 | $223,711 | | **Income before income taxes** | Housekeeping | $18,442 | $20,053 | | | Dietary | $17,627 | $14,666 | [Note 15: Other Contingencies](index=32&type=section&id=Note%2015%E2%80%94Other%20Contingencies) The company maintains a $300.0 million line of credit, with $187.6 million available for borrowing as of March 31, 2024 - As of March 31, 2024, the company had a **$300.0 million line of credit** with **$40.0 million in borrowings**[126](index=126&type=chunk) - The amount available under the line of credit was reduced by **$72.4 million for outstanding letters of credit**, leaving $187.6 million available for borrowing[127](index=127&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue increased 1.5% in Q1 2024, driven by Dietary segment growth, while operating cash flow was negative [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Consolidated revenue grew 1.5% in Q1 2024, driven by a 4.1% increase in the Dietary segment Segment Revenue and Income Change (Q1 2024 vs Q1 2023) | Segment | Revenue % Change | Income Before Taxes % Change | | :--- | :--- | :--- | | Housekeeping | (1.5)% | (8.0)% | | Dietary | 4.1% | 20.2% | | **Consolidated** | **1.5%** | **31.9%** | - Costs of services provided as a percentage of revenue **decreased from 86.9% in Q1 2023 to 84.8% in Q1 2024**[148](index=148&type=chunk) - The decrease in the bad debt provision was impacted by a **non-recurring $4.7 million charge in Q1 2023**[152](index=152&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company had $104.9 million in cash and marketable securities, with negative operating cash flow of $26.0 million - **Negative operating cash flow** in Q1 2024 was driven by an increase in accounts receivable, partly due to a cybersecurity incident at a third-party claims processor[164](index=164&type=chunk) - On February 14, 2023, the Board authorized a repurchase of up to 7.5 million shares; **no shares were repurchased in Q1 2024**[167](index=167&type=chunk) - The company was in **compliance with its two financial covenants** (Funded debt to EBITDA and EBITDA to Interest Expense) as of March 31, 2024[169](index=169&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is interest rate risk on its $129.6 million in cash and investments - The company's primary market risk exposure is **interest rate risk** on its fixed-rate and floating-rate investments[178](index=178&type=chunk) - As of March 31, 2024, the company had **$129.6 million in cash, cash equivalents, and marketable securities** subject to this risk[177](index=177&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that internal control over financial reporting was not effective due to a material weakness - Management concluded that as of March 31, 2024, the company's internal control over financial reporting was **not effective**[180](index=180&type=chunk) - A **material weakness** was identified related to controls over accrued payroll liabilities for employee vested vacation[182](index=182&type=chunk) - A **remediation plan is underway**, which includes instituting enhanced controls and review processes related to the vacation accrual[184](index=184&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings for which potential losses cannot be reasonably estimated at this time - The company is subject to various claims and legal actions in the **ordinary course of business**[188](index=188&type=chunk) - For certain pending litigation, the company is **unable to reasonably estimate possible losses** or determine if an unfavorable outcome is probable[189](index=189&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2023 Annual Report on Form 10-K - **No material changes** have occurred in the risk factors from those set forth in the company's 2023 Form 10-K[191](index=191&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased in Q1 2024 under the existing 7.5 million share repurchase authorization - The Board of Directors authorized the repurchase of up to **7.5 million shares** on February 14, 2023[192](index=192&type=chunk) - **No shares were repurchased** during the three months ended March 31, 2024, and 6.5 million shares remain authorized for purchase[192](index=192&type=chunk) [Defaults Upon Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified a Rule 10b5-1 trading arrangement in Q1 2024 - **No directors or officers modified trading arrangements** during the three months ended March 31, 2024[195](index=195&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q report, including officer certifications and iXBRL data

Financial Data and Key Metrics Changes - For Q1 2024, the company reported revenue of $423.4 million, net income of $15.3 million, and diluted EPS of $0.21, with adjusted net income of $16.5 million and adjusted diluted EPS of $0.22, reflecting a 10.7% increase in adjusted EBITDA compared to Q1 2023 [4][12][24] - The adjusted cost of services was 84.4%, with SG&A at $46.9 million, and adjusted SG&A at 10.1%, which is outside the target range of 8.5% to 9.5% [30][34] Business Line Data and Key Metrics Changes - Revenue from the Housekeeping and Laundry segment was $190.5 million, while the Dining & Nutrition segment generated $232.9 million, with margins of 9.7% and 7.6% respectively [11] - The company managed adjusted cost of services under 86% and aims to maintain this target moving forward [23][26] Market Data and Key Metrics Changes - The healthcare industry added nearly 100,000 jobs since the beginning of 2023, with workforce availability expected to match pre-pandemic levels by the end of 2025 [6] - Occupancy rates have risen to 79%, just 1% below pre-pandemic levels, supported by a stable reimbursement environment, including a proposed 4.1% increase in Medicare rates for fiscal year 2025 [6][25] Company Strategy and Development Direction - The company is focused on organic growth through hiring, training, and converting sales opportunities into new business, with expectations for significant new business additions in the second half of 2024 [8][23] - The company is committed to managing adjusted cost of services and improving cash collections, viewing cash collections as a lagging indicator of industry recovery [27][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the February Change Healthcare cyberattack on cash collections and billing activities, but expressed confidence in recovering from this disruption [5][24] - The company reiterated its adjusted cash flow range for 2024 of $40 million to $55 million, with expectations for improved cash collections throughout the year [9][61] Other Important Information - The company is facing opposition to the recently published minimum staffing rule, with expectations that it may not be implemented or will undergo significant revisions [7][25] - The company is actively working on plans to make up for cash collection shortfalls caused by the Change Healthcare issue, with expectations for gradual recovery [50][82] Q&A Session Summary Question: Client retention in the quarter - Client retention was greater than 90%, with modest new business adds offsetting some exits, and expectations for additional facility adds in the second half of the year [33] Question: Adjusted SG&A being outside the target range - The increase in adjusted SG&A was attributed to investments in branding and technology, which are viewed as critical for future growth [34][35] Question: Signs of collections in April - Collections in April were pacing as forecasted, with confidence that the impact of the Change Healthcare disruption is temporary [38][61] Question: Expected second half ramp in organic growth - The company expects ongoing revenue growth in the second half, with more new business onboarding compared to the first half [44][45] Question: Impact of minimum staffing requirements - Management believes the rule will not be implemented or will undergo significant changes, and uncertainty in the industry creates demand for the company's services [68][69] Question: Cash flow expectations for the remainder of the year - The company reaffirmed its cash flow range of $40 million to $55 million, with expectations for gradual recovery from the Change Healthcare impact [70][72]

Healthcare Services (HCSG) came out with quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.18 per share. This compares to earnings of $0.17 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 22.22%. A quarter ago, it was expected that this provider of housekeeping, laundry and dietary services to health care facilities would post earnings of $0.16 per share when it actually produced earnings of $0. ...

[Performance Overview & Management Commentary](index=1&type=section&id=Performance%20Overview%20%26%20Management%20Commentary) HCSG reported strong Q1 2024 results, exceeding earnings and reaffirming full-year forecasts despite temporary cash collection challenges - The company delivered strong Q1 results, managing **adjusted cost of services under the 86% target** and growing new business and manager-in-training pipelines[2](index=2&type=chunk) - The February Change Healthcare cyberattack disrupted customer billing, impacting cash collections, though the company achieved **95% cash collections** and views the impact as temporary[2](index=2&type=chunk) - The company reiterated its **2024 adjusted cash flow forecast of $40.0 million to $55.0 million**, confident in recovering collection delays[2](index=2&type=chunk) - Positive industry fundamentals include improving workforce availability, **79% occupancy** (near pre-pandemic levels), and a proposed **4.1% increase in Medicare rates** for fiscal year 2025[2](index=2&type=chunk) [Q1 2024 Financial Highlights](index=1&type=section&id=Q1%202024%20Financial%20Highlights) HCSG reported Q1 2024 revenue of **$423.4 million**, with adjusted diluted EPS of **$0.22** and adjusted EBITDA growth of **10.7%** Q1 2024 Key Financial Metrics (in millions, except EPS) | Metric | GAAP | Adjusted | | :--- | :--- | :--- | | Revenue | $423.4 | $423.4 | | Cost of services | $358.9 | $357.3 | | Selling, general and administrative | $46.9 | $42.8 | | Earnings per share | $0.21 | $0.22 | | Cash flows used in operating activities | ($26.0) | ($9.2) | - Adjusted EBITDA increased by **10.7% to $28.9 million** compared to Q1 2023[4](index=4&type=chunk) [Detailed Financial & Operational Results](index=2&type=section&id=Detailed%20Financial%20%26%20Operational%20Results) Q1 2024 saw Dining & Nutrition as the primary revenue driver, with effective cost control reflected in **84.4% adjusted cost of services** and **10.1% adjusted SG&A** Q1 2024 Segment Performance | Segment | Revenue (in millions) | Margin | | :--- | :--- | :--- | | Housekeeping & Laundry | $190.5 | 9.7% | | Dining & Nutrition | $232.9 | 7.6% | - Adjusted cost of services was **84.4%**, within the company's target range of **86%**[7](index=7&type=chunk) - Adjusted SG&A was **10.1% of revenue**, slightly above the company's goal of **8.5% to 9.5%**[7](index=7&type=chunk) [Financial Condition and Liquidity](index=2&type=section&id=Financial%20Condition%20and%20Liquidity) HCSG maintained a robust Q1 2024 balance sheet with a **2.8 to 1 current ratio** and **$129.6 million in cash**, reiterating its full-year adjusted cash flow forecast - As of Q1 end, the company maintained a strong liquidity position with **$129.6 million in cash and marketable securities** and a **$500.0 million credit facility**[5](index=5&type=chunk) - The current ratio stood at **2.8 to 1** at the end of the first quarter[5](index=5&type=chunk) - The company reiterated its **2024 adjusted cash flow from operations forecast of $40.0 million to $55.0 million**[5](index=5&type=chunk) [Business Outlook](index=1&type=section&id=Business%20Outlook) HCSG forecasts Q2 2024 revenue between **$420.0 million and $430.0 million** and reaffirms its full-year adjusted cash flow from operations forecast - The company estimates Q2 2024 revenue will be in the range of **$420.0 million to $430.0 million**[7](index=7&type=chunk) - The company expects year-over-year revenue growth in 2024, with most new business additions anticipated in the second half[2](index=2&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents the unaudited consolidated statements of income and condensed consolidated balance sheets as of March 31, 2024 [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2024 revenue grew to **$423.4 million**, leading to a net income increase to **$15.3 million** (**$0.21 per diluted share**) Q1 Income Statement Comparison (in thousands, except EPS) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $423,433 | $417,230 | | Income from operations | $17,611 | $14,804 | | Net income | $15,309 | $11,671 | | Diluted EPS | $0.21 | $0.16 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets reached **$803.9 million**, driven by higher accounts receivable, with stockholders' equity increasing to **$474.6 million** Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and marketable securities | $104,906 | $147,461 | | Accounts and notes receivable, net | $407,140 | $383,509 | | Total current assets | $580,414 | $571,696 | | Total assets | $803,880 | $790,652 | | Total current liabilities | $209,375 | $216,928 | | Total stockholders' equity | $474,581 | $456,616 | [Non-GAAP Financial Measures & Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) HCSG uses non-GAAP measures, with Q1 2024 Adjusted EBITDA increasing to **$28.9 million** and adjusted cash flows from operations at **($9.2 million)** - The company uses non-GAAP measures including adjusted cost of services, adjusted SG&A, adjusted net income, Adjusted EBITDA, and adjusted cash flows to evaluate operating performance[12](index=12&type=chunk)[13](index=13&type=chunk) Reconciliation of GAAP Net Income to Adjusted EBITDA (in thousands) | Description | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP net income | $15,309 | $11,671 | | Adjustments (Taxes, Interest, D&A, etc.) | $9,488 | $8,306 | | EBITDA | $24,797 | $19,977 | | Other Adjustments (Share-based comp, etc.) | $4,118 | $6,137 | | **Adjusted EBITDA** | **$28,915** | **$26,114** | Reconciliation of GAAP to Adjusted Cash Flows from Operations (in thousands) | Description | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP cash flows used in operations | $(26,033) | $(16,290) | | Accrued payroll adjustment | $16,815 | $21,167 | | **Adjusted cash flows (used in) provided by operating activities** | **$(9,218)** | **$4,877** | [Cautionary Statement Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section outlines inherent risks in forward-looking statements, including dependence on the healthcare industry, credit challenges, inflation, regulatory changes, and the need for new customer contracts - The report contains forward-looking statements based on current expectations, subject to various risks and uncertainties[9](index=9&type=chunk) - Key risks include dependence on the healthcare industry, credit and collection risks, workers' compensation claims, and changes in government regulations[9](index=9&type=chunk) - The company's ability to improve financial performance depends on securing new service agreements, retaining existing customers, and effective internal cost management[11](index=11&type=chunk)