Healthcare Services Group, Inc. (NASDAQ:HCSG) Q2 2021 Results Conference Call July 21, 2021 8:30 AM ET Company Participants Ted Wahl - President and CEO Matt McKee - Head of Corporate Communications Conference Call Participants Nat Putnam - Credit Suisse Thomas Keller - RBC Capital Markets Andrew Wittmann - Baird Nick Spiekhout - William Blair Jack Slevin - Jefferies Mitra Ramgopal - Sidoti Tao Qiu - Stifel Operator The matters discussed on today's conference call include forward-looking statements about th ...

Revenue Performance - Consolidated revenues decreased by 9.2% to $407.8 million for the three months ended March 31, 2021, compared to $449.2 million for the same period in 2020[149]. - Housekeeping revenues decreased by 4.1% to $215.1 million, while Dietary revenues decreased by 14.3% to $192.7 million for the three months ended March 31, 2021[150]. - COVID-19 supplemental billings contributed $3.9 million to revenues for the quarter ended March 31, 2021, primarily related to employee pay premiums[134]. Cost Management - Consolidated costs of services provided decreased by 13.1% to $336.6 million for the three months ended March 31, 2021, compared to $387.2 million for the same period in 2020[151]. - The costs of services provided for Housekeeping decreased to 86.9% of Housekeeping revenues, down from 89.3% in the corresponding period in 2020[153]. - Dietary labor and other labor-related costs were 63.4% of Dietary revenues for the three months ended March 31, 2021, a slight decrease from 63.6% in the same period in 2020[154]. Expenses - Selling, general and administrative expenses increased by $2.9 million or 8.1% for the three months ended March 31, 2021, primarily due to increased payroll costs and higher legal fees[156]. - Selling, general and administrative expenses increased by 33.2% to $39.987 million for the three months ended March 31, 2021, compared to $30.017 million in the same period of 2020[157]. Financial Position - Cash, cash equivalents, and marketable securities totaled $249.4 million at March 31, 2021, down from $264.3 million at December 31, 2020[162]. - The company has a $475 million bank line of credit with no borrowings as of March 31, 2021, and is in compliance with its financial covenants[171][172]. - The company remains authorized to repurchase 1.7 million shares of common stock, having purchased 9,000 shares for a total cost of $259,000 after March 31, 2021[170]. Income and Taxation - Investment and other income rose by 144.9% to $2.2 million for the three months ended March 31, 2021, primarily due to market fluctuations in trading security investments[158]. - Consolidated interest expense decreased by 2.7% to $0.4 million for the three months ended March 31, 2021, due to fewer interquarter borrowings[159]. - The provision for income taxes was $8.3 million with a 25.2% effective tax rate for the three months ended March 31, 2021, compared to $6.6 million and a 24.6% effective tax rate in the same period of 2020[160]. Cash Flow - Net cash provided by operating activities was $3.502 million for the three months ended March 31, 2021, compared to $12.688 million in the same period of 2020[163]. - The company expects to continue paying regular quarterly cash dividends, having paid $15.5 million in dividends during the first quarter of 2021[168]. Litigation and Risks - The Company is actively defending against all ongoing litigation claims, which may result in substantial costs and affect business conditions[192]. - Uncertainties from pending lawsuits could lead to increased volatility and a potential reduction in the Company's stock price[192]. - The ultimate outcome of litigation matters could materially impact the Company's results of operations depending on the size of the loss or liability and the level of operating income[193]. Capital Expenditures - Capital expenditures for 2021 are estimated to be between $4.0 million and $6.0 million, with $0.9 million spent through March 31, 2021[176]. Liquidity - The company maintained operating cash flows to meet short-term liquidity needs and did not observe material impairments of assets due to the COVID-19 pandemic[136].

Financial Data and Key Metrics Changes - Revenue for Q1 2021 was reported at $407.8 million, with net income at $24.7 million and earnings per share at $0.33 [15][16] - Direct cost of services was $336.6 million, representing 82.6% of revenue, which is below the historical target of 86% [16] - SG&A expenses were reported at $40 million, or 9.8%, but adjusted for deferred compensation, actual SG&A was $38.7 million, or 9.5% [16][17] - Cash flow from operations for the quarter was $3.5 million, including a $30.7 million decrease in accrued payroll [19] Business Line Data and Key Metrics Changes - Housekeeping & laundry segment revenues were $215 million, while dining & nutrition segment revenues were $192.8 million [15] - Margins for housekeeping & laundry and dining & nutrition segments were reported at 13.1% and 10.4%, respectively [16] Market Data and Key Metrics Changes - The vaccine rollout has led to a significant drop in new COVID cases among patients and residents, decreasing over 90% from Q4 to Q1 [9][10] - Stabilization in occupancy levels has been observed, which is seen as a positive indicator for recovery [10][31] Company Strategy and Development Direction - The company anticipates a gradual recovery over the next 12 to 18 months, with ongoing federal and state support being crucial [10][11] - The focus remains on managing costs efficiently while preparing for potential growth opportunities in the latter half of the year [12][28] - The company is exploring new business opportunities, particularly in cross-selling dining services to existing clients [67][68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery, citing the vaccine's impact and the stabilization of occupancy as key factors [10][31] - The company is closely monitoring federal and state funding actions that could affect financial stability [94] - There is confidence in retaining a high percentage of business during customer transitions, with a historical retention rate of over 90% [82] Other Important Information - The company announced an increase in the dividend to $0.2075 per share, marking the 72nd consecutive cash dividend payment [21][22] - The ongoing SEC investigation remains a concern, but discussions for resolution are in progress [13][6] Q&A Session Summary Question: What are the drivers behind the margin improvement? - Management highlighted efficient cost management and the expectation of maintaining some margin improvements despite potential inefficiencies as growth resumes [26][28] Question: What needs to happen for revenue growth to resume in the second half of the year? - Management indicated that stabilization in census levels and ongoing vaccination efforts are critical for recovery [31][32] Question: How is the relationship with Genesis, the largest customer, affecting growth outlook? - The partnership remains strong, and management expects to retain business even as Genesis divests facilities [39][42] Question: What is the outlook on bad debt expense given the repayment of advance Medicare payments? - Management expressed confidence in the collection process and indicated that they are monitoring the situation closely [44][95] Question: What is the company's approach to new business opportunities amid industry deconsolidation? - Management emphasized a bottoms-up approach to business development, focusing on local relationships and operational execution [87]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number: 0-12015 HEALTHCARE SERVICES GROUP, INC. (Exact name of registrant as specified in its charter) (State or ...

Healthcare Services Group, Inc. (NASDAQ:HCSG) Q4 2020 Earnings Conference Call February 10, 2021 8:30 AM ET Company Participants Ted Wahl - President and Chief Executive Officer Matt McKee - Chief Communications Officer Conference Call Participants A.J. Rice - Credit Suisse Sean Dodge - RBC Capital Markets Nick Spiekhout - William Blair Bill Sutherland - The Benchmark Company Brian Tanquilut - Jefferies Mitra Ramgopal - Sidoti & Company Operator The matters discussed on today's conference call include forwa ...

Healthcare Services Group, Inc. (NASDAQ:HCSG) Q3 2020 Earnings Conference Call October 21, 2020 8:30 AM ET Company Participants Ted Wahl - President and Chief Executive Officer Matt McKee - Chief Communications Officer Conference Call Participants Andrew Wittmann - Baird A.J. Rice - Credit Suisse Sean Dodge - RBC Capital Markets Nick Spiekhout - RBC Brian Tanquilut - Jefferies James Terwilliger - Northland Capital Mitra Ramgopal - Sidoti Operator Ladies and gentlemen, thank you for standing by and welcome t ...

Healthcare Services Group, Inc. (NASDAQ:HCSG) Q2 2020 Earnings Conference Call July 22, 2020 8:30 AM ET Company Participants Ted Wahl - President & CEO Matt McKee - CCO Conference Call Participants Andrew Wittmann - Baird Sean Dodge - RBC Capital Markets Ryan Daniels - William Blair A.J. Rice - Credit Suisse Brian Tanquilut - Jefferies Bill Sutherland - Benchmark Company Operator The matters discussed on today's conference call include forward-looking statements about the business prospects of Healthcare Se ...

Call Start: 08:30 January 1, 0000 9:14 AM ET Healthcare Services Group, Inc. (NASDAQ:HCSG) Q1 2020 Earnings Conference Call April 22, 2020, 8:30 am ET Company Participants Ted Wahl - President & CEO Matt McKee - CCO Conference Call Participants Andrew Wittmann - Baird Sean Dodge - RBC Capital Markets Nick Spiekhout - William Blair A.J. Rice - Credit Suisse Mitra Ramgopal - Sidoti Jason Plagman - Jefferies Operator Ladies and gentlemen, thank you for standing by, and welcome to the HCSG Q1 Earnings Call. The ...

Healthcare Services Group, Inc. (NASDAQ:HCSG) Q4 2019 Earnings Conference Call February 12, 2020 8:30 AM ET Company Participants Ted Wahl - President & Chief Executive Officer Matt McKee - Vice President, Strategy Conference Call Participants Andrew Wittmann - Baird Sean Dodge - RBC Capital Markets Jason Plagman - Jefferies Ryan Daniels - William Blair Mitra Ramgopal - Sidoti Bill Sutherland - The Benchmark Company Chad Vanacore - Stifel A.J. Rice - Credit Suisse Operator Ladies and gentlemen, thank you for ...

Financial Data and Key Metrics Changes - Revenue for Q3 was reported at $455 million, with Dining & Nutrition at $230 million and Housekeeping & Laundry at $225 million [18] - Net income for the quarter was $18.3 million, with earnings per share at $0.25 [19] - Direct cost of services was reported at 87.4%, with segment margins of 9.6% for Housekeeping and 3.8% for Dining [19][20] - Selling, general and administrative expenses were $33 million, or 7.3% of revenue [21] - Cash flow from operations for the quarter was $60 million, with a current ratio better than 3:1 [24] Business Line Data and Key Metrics Changes - Incremental revenue impact from facility exits in Q4 is expected to be about $15 million, with $10 million in Dining and $5 million in Housekeeping & Laundry [18] - Temporary cost increases of about $4 million were related to payroll for account managers and $2 million for start-up costs and inefficiencies [19][20] Market Data and Key Metrics Changes - Days Sales Outstanding (DSO) increased to 70 days due to a decrease in long-term notes receivable now classified as current [25] - The company has over $120 million in cash and marketable securities [24] Company Strategy and Development Direction - The company aims to manage the base business efficiently while selectively assigning managers to new opportunities [15] - A cautious view on growth is maintained as the industry transitions to a patient-driven payment model [15][36] - The company remains committed to long-term growth and delivering shareholder value [16][36] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the implementation of the patient-driven payment model (PDPM), noting positive experiences from customers [31][36] - Industry fundamentals are improving, with occupancy trends and reimbursement programs showing positive signs [36][98] - Management emphasized the importance of disciplined decision-making, especially regarding credit-related matters [38] Other Important Information - The Board approved an increase in the dividend to $0.20 per share, marking the 66th consecutive dividend payment [25][26] - The company is under an ongoing SEC investigation, which could impact financial results [5][6][7] Q&A Session Summary Question: Early read on PDPM implementation - Management reported positive experiences from customers regarding PDPM implementation so far [31] Question: Revenue growth expectations - Management advised a cautious view on revenue growth, suggesting a wait-and-see approach for Q4 and Q1 [34][36] Question: Credit quality monitoring - Management detailed a multi-pronged strategy for monitoring credit quality, including payment frequency and facility-level insights [42][50] Question: New business signed in Q3 - Approximately $50 million in annualized revenue was added in Q3, with about $12 million recognized during the period [52] Question: Excess facility managers - Management indicated that the number of excess managers is fluid, with confidence in placing them within 6 to 12 months [68] Question: Impact of PDPM on client implementations - Management acknowledged that PDPM is a primary focus for clients, which may delay new business opportunities [64] Question: Cash flow expectations - Management expects cash flow for the year to be around $80 million, with potential for additional cash flow in Q4 [74][105]