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 ...

Financial Data and Key Metrics Changes - Revenue for Q2 2020 was $452 million, including $17.2 million of COVID-19 related supplemental billings, which were offset by temporary decreases in recurring billings due to census-driven cost reductions [16][18] - Net income for the quarter was $24.3 million, with earnings per share at $0.31 [18] - Direct cost of services was $387.5 million, representing 85.7% of revenue, with a near-term goal to manage direct costs at or below 86% [18][19] - Cash flow from operations was $79.7 million, with a current ratio better than 3:1 and cash and marketable securities exceeding $170 million [21][24] Business Line Data and Key Metrics Changes - Housekeeping and laundry segment revenue was $227.6 million, while dining and nutrition segment revenue was $224.4 million [16] - Margins for housekeeping and laundry and dining and nutrition segments were 11.1% and 8.3% respectively [19] Market Data and Key Metrics Changes - The company entered Q3 with a recurring billing run rate of approximately $430 million, expecting temporary reductions in costs and recurring billings to remain until census recovers [17] - Days Sales Outstanding (DSO) for the quarter was 60 days, down 2 days from the previous quarter [23] Company Strategy and Development Direction - The company remains committed to supporting customers in patient care while ensuring employee safety, focusing on operational impacts of COVID-19 [11][12] - Future growth is viewed cautiously, with a focus on innovation and flexibility in response to client needs [14] - The company aims to leverage existing growth opportunities while maintaining a robust pipeline for future business [76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the return of favorable operating trends post-pandemic, citing demographic tailwinds and needs-based nature of the industry [13] - There is a belief that government support will continue until recovery is achieved, with a focus on targeted stimulus for the most impacted providers [52][54] Other Important Information - The Board of Directors approved an increase in the dividend to $0.20375 per share, marking the 68th consecutive quarterly increase [24][25] - The company has seen a significant increase in cash collection frequency, with over 60% of customers paying more frequently than monthly [33] Q&A Session Summary Question: Demand for new outsourcing and facilities - Management indicated a cautious view on growth due to uncertainty in the current environment, with stronger demand than ever but timing considerations for onboarding new facilities [30][32] Question: Cash collections and future expectations - Management highlighted strong cash flow driven by increased payment frequency from customers, with expectations for Q3 and Q4 cash collections to be impacted by payroll accruals [34][35] Question: Revenue trends and supplemental billings - Supplemental billings related to COVID-19 have no margin, and lower occupancy has driven a need for less labor, impacting revenues [40][42] Question: Government support and future funding - Management believes more government support is needed, with significant opportunities for clarity around testing and potential COVID-related immunity [52][53] Question: Long-term behavior changes in healthcare preferences - Management expressed reluctance to forecast long-term changes but noted that the need for 24/7 care in long-term facilities remains a significant factor [62][63] Question: Recruitment and turnover in the current environment - Management reported continued applications for positions, indicating a commitment to the industry despite challenges posed by the pandemic [80][82] Question: Visibility into census-driven adjustments - Management noted that most adjustments were outside the contract and made in collaboration with customers, with no indications of troubled waters ahead [88][90]

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 ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Healthcare Services Group, Inc. provides management and operating services for housekeeping, laundry, and dietary departments in over 3,000 U.S. healthcare facilities, with significant revenue from Genesis Healthcare, Inc. and renewable one-year service agreements - The company operates through two main segments: **Housekeeping** and **Dietary**[16](index=16&type=chunk) 2019 Revenue Breakdown by Segment | Segment | 2019 Revenue ($ million) | % of Total | | :--- | :--- | :--- | | Housekeeping | $909.5 million | 49.4% | | Dietary | $931.3 million | 50.6% | - **Genesis Healthcare, Inc.** accounted for **15.6%** of consolidated revenues in 2019, a decrease from 19.3% in 2018[25](index=25&type=chunk) - Service agreements are typically for a renewable one-year term, cancellable with 30 to 90 days' notice after an initial period[18](index=18&type=chunk) Bad Debt Provisions (2017-2019) | Year | Bad Debt Provision ($ million) | % of Total Revenues | | :--- | :--- | :--- | | 2019 | $25.5 million | 1.4% | | 2018 | $51.4 million | 2.6% | | 2017 | $6.3 million | 0.3% | [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from customer concentration, healthcare industry reimbursement changes, self-funded insurance liabilities, an ongoing SEC investigation, and the short-term nature of service agreements - **Genesis** contributed **15.6%** of total consolidated revenues in 2019, posing a material risk if revenue is lost or significantly reduced[47](index=47&type=chunk) - Client reliance on **Medicare** and **Medicaid** reimbursement exposes the company to changes in government healthcare regulations and funding[48](index=48&type=chunk) - Substantial risk is retained through high-deductible general liability and workers' compensation insurance plans, potentially causing significant operating result fluctuations[54](index=54&type=chunk) - An ongoing **SEC investigation** into EPS calculation practices, initiated in November 2017, could lead to sanctions, penalties, and litigation, adversely affecting financial results[71](index=71&type=chunk)[72](index=72&type=chunk) - A shareholder class action lawsuit filed in March 2019, related to the SEC investigation, could incur significant expenses and divert management's attention[73](index=73&type=chunk) [Unresolved Staff Comments](index=17&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[78](index=78&type=chunk) [Properties](index=17&type=section&id=Item%202.%20Properties) The company leases its corporate headquarters and regional offices, also utilizing client facilities for space, deeming current properties sufficient for operations - The company leases its corporate offices in **Bensalem, PA**, and other regional offices across various states[79](index=79&type=chunk) - Owned assets, including office furniture, vehicles, and equipment at corporate and client facilities, are deemed sufficient for current operations[81](index=81&type=chunk) [Legal Proceedings](index=17&type=section&id=Item%203.%20Legal%20Proceedings) The company is cooperating with an ongoing SEC investigation into EPS calculation practices and defending against a related shareholder class action lawsuit, with potential losses currently inestimable - The **SEC** is investigating the company's **EPS calculation practices**, initiated with an inquiry in November 2017 and a formal subpoena in March 2018[83](index=83&type=chunk) - A shareholder class action lawsuit related to EPS calculation practices was filed on March 22, 2019, and amended in September 2019 to extend the class period and include additional defendants[84](index=84&type=chunk) - Due to the early stage of litigation, the company cannot reasonably estimate possible losses or determine the probability of an unfavorable outcome[85](index=85&type=chunk) [Mine Safety Disclosures](index=17&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[87](index=87&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=18&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under 'HCSG', with 74.4 million shares outstanding as of February 2020, and its five-year cumulative return underperformed major indices in 2019 - The company's common stock trades on the **NASDAQ Global Select Market** under the symbol **'HCSG'**[89](index=89&type=chunk) 5-Year Cumulative Total Return Comparison | Company/Index | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Healthcare Services Group, Inc. | $100.00 | $115.15 | $131.93 | $180.44 | $140.04 | $87.18 | | S&P 500 | $100.00 | $101.38 | $113.51 | $138.29 | $132.23 | $173.86 | | Russell 2000 | $100.00 | $95.59 | $115.95 | $132.94 | $118.30 | $148.49 | | NASDAQ Composite | $100.00 | $106.96 | $116.45 | $150.96 | $146.67 | $200.49 | [Selected Financial Data](index=20&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five years of key financial data (2015-2019), highlighting trends in revenues, net income, EPS, assets, equity, and cash dividends, with notable decreases in revenues and net income in 2019 Selected Financial Data (2017-2019) | Metric | 2019 ($M) | 2018 ($M) | 2017 ($M) | | :--- | :--- | :--- | :--- | | **Revenues** | $1,840.8 | $2,002.6 | $1,861.2 | | **Net income** | $64.6 | $83.5 | $88.2 | | **Diluted EPS** | $0.87 | $1.12 | $1.19 | | **Total assets** | $722.6 | $692.6 | $676.0 | | **Stockholders' equity** | $460.3 | $440.8 | $399.9 | | **Cash dividends declared per share** | $0.7975 | $0.7775 | $0.7575 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 2019 financial results, critical accounting policies, and liquidity, noting an 8.1% revenue decrease to $1.8 billion and a decline in net income, with cash from operations as the primary liquidity source [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Consolidated revenues decreased 8.1% to $1.84 billion in 2019, with net income falling to $64.6 million, driven by declines in both Housekeeping and Dietary segments and increased legal fees Consolidated Financial Performance Comparison (2019 vs. 2018) | Metric | 2019 ($M) | 2018 ($M) | % Change | | :--- | :--- | :--- | :--- | | **Revenues** | $1,840.8 | $2,002.6 | (8.1)% | | Housekeeping Revenues | $909.5 | $967.6 | (6.0)% | | Dietary Revenues | $931.3 | $1,035.0 | (10.0)% | | **Income before income taxes** | $85.1 | $99.9 | (14.8)% | - The decline in **Dietary revenue** was primarily due to a modified contract with **Genesis**, effective December 1, 2018, where Genesis assumed direct payment for food purchases[117](index=117&type=chunk) Key Cost Indicators as % of Consolidated Revenue | Indicator | 2019 (%) | 2018 (%) | | :--- | :--- | :--- | | Bad debt provision | 1.4% | 2.6% | | Self-insurance costs | 2.7% | 1.9% | - Selling, general and administrative expenses increased by **$4.6 million (3.3%)** in 2019, primarily due to increased legal and professional fees related to the **SEC inquiry**[121](index=121&type=chunk) - The effective tax rate increased to **24.1%** in 2019 from 16.4% in 2018, mainly due to reduced **Worker Opportunity Tax Credit (WOTC)** program credits[125](index=125&type=chunk) [Critical Accounting Policies and Estimates](index=26&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting estimates including Allowance for Doubtful Accounts, Accrued Insurance Claims, and Income Taxes, all requiring significant judgment and susceptible to revision Allowance for Doubtful Accounts Activity (2017-2019) | Year | Bad Debt Provision ($M) | Net Write-offs ($M) | Ending Balance ($M) | | :--- | :--- | :--- | :--- | | 2019 | $25.5 | $30.3 | $52.4 | | 2018 | $51.4 | $6.2 | $57.2 | | 2017 | $6.3 | $1.2 | $12.0 | Accrued Insurance Claims Activity (2017-2019) | Year | Beginning Balance ($M) | Claim Payments ($M) | Current Year Accruals ($M) | Prior Year Adj. ($M) | Ending Balance ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2019 | $79.6 | ($35.8) | $45.9 | ($2.1) | $87.6 | | 2018 | $84.7 | ($34.9) | $45.5 | ($15.7) | $79.6 | | 2017 | $87.7 | ($41.1) | $49.7 | ($11.6) | $84.7 | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity primarily stems from cash from operations, with $118.0 million in cash and equivalents and $367.1 million in working capital as of December 2019, supported by a $475 million credit facility and ongoing dividend payments Cash Flow Summary (2017-2019) | Cash Flow Activity | 2019 ($M) | 2018 ($M) | 2017 ($M) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | $93.6 | $80.0 | $7.6 | | Net cash used in investing activities | ($16.5) | ($9.6) | ($15.0) | | Net cash used in financing activities | ($75.8) | ($54.0) | ($7.0) | - The company paid **$59.0 million** in cash dividends in 2019 and declared a subsequent quarterly dividend of **$0.20125 per share** in February 2020[146](index=146&type=chunk) - The company maintains a **$475 million** bank line of credit expiring in December 2023, with **$10.0 million** drawn and **$402.3 million** available as of December 31, 2019[151](index=151&type=chunk)[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations affecting its **$90.7 million** municipal bond portfolio, where rising rates could adversely impact fixed-rate security values - As of December 31, 2019, the company held **$90.7 million** in municipal bonds, which are subject to interest rate risk[165](index=165&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2017-2019, including auditor's report, management's internal control report, balance sheets, income statements, cash flows, equity statements, and detailed notes [Consolidated Financial Statements](index=40&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show 2019 revenues decreased to **$1.84 billion** and net income to **$64.6 million**, while total assets increased to **$722.6 million**, stockholders' equity to **$460.3 million**, and operating cash flow improved to **$93.6 million** Consolidated Balance Sheet Highlights (as of Dec 31) | Account | 2019 ($M) | 2018 ($M) | | :--- | :--- | :--- | | Total current assets | $515.7 | $508.1 | | Total assets | $722.6 | $692.6 | | Total current liabilities | $148.7 | $163.4 | | Total stockholders' equity | $460.3 | $440.8 | Consolidated Income Statement Highlights (Year Ended Dec 31) | Account | 2019 ($M) | 2018 ($M) | 2017 ($M) | | :--- | :--- | :--- | :--- | | Revenues | $1,840.8 | $2,002.6 | $1,861.2 | | Income before income taxes | $85.1 | $99.9 | $133.0 | | Net income | $64.6 | $83.5 | $88.2 | | Diluted EPS | $0.87 | $1.12 | $1.19 | [Notes to Consolidated Financial Statements](index=45&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue recognition, segment data, legal contingencies, and share-based compensation, including ASC 842 adoption, Genesis client concentration, ongoing SEC investigation, and the anticipated **$36 million to $44 million** impact of ASC 326 adoption on credit losses - The company adopted **ASC 842** on January 1, 2019, capitalizing existing operating leases[224](index=224&type=chunk) - The company expects to adopt **ASC 326** on January 1, 2020, projecting an increase in allowance for credit losses by approximately **$36 million to $44 million**, with a corresponding reduction to retained earnings[245](index=245&type=chunk) - As of December 31, 2019, remaining performance obligations totaled **$696.1 million**, with approximately **24%** expected to be recognized as revenue within the next 12 months[255](index=255&type=chunk) - The company offers a **Supplemental Executive Retirement Plan (SERP)** and an **Employee Stock Purchase Plan (ESPP)** for eligible employees[303](index=303&type=chunk)[306](index=306&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=71&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None reported[340](index=340&type=chunk) [Controls and Procedures](index=71&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of December 31, 2019, the CEO and CFO concluded the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the period - The **CEO** and **CFO** concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[341](index=341&type=chunk) - No material changes to internal control over financial reporting occurred during the period[343](index=343&type=chunk) [Other Information](index=71&type=section&id=Item%209B.%20Other%20Information) This item is not applicable - Not applicable[344](index=344&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=72&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 proxy statement, and the company maintains a code of ethics for all employees - Information is incorporated by reference from the **2020 proxy statement**[346](index=346&type=chunk) - The company has a code of ethics available on its website[347](index=347&type=chunk) [Executive Compensation](index=72&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2020 proxy statement - Information is incorporated by reference from the **2020 proxy statement**[348](index=348&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=72&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the company's 2020 proxy statement - Information is incorporated by reference from the **2020 proxy statement**[349](index=349&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=72&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the company's 2020 proxy statement - Information is incorporated by reference from the **2020 proxy statement**[350](index=350&type=chunk) [Principal Accountant Fees and Services](index=72&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2020 proxy statement - Information is incorporated by reference from the **2020 proxy statement**[351](index=351&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=73&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including Schedule II—Valuation and Qualifying Accounts and Reserves, corporate documents, and certifications - Lists all financial statements, schedules, and exhibits filed with the report[354](index=354&type=chunk) Schedule II - Allowance for Doubtful Accounts | Year | Beginning Balance ($M) | Additions (Charged to Costs) ($M) | Deductions ($M) | Ending Balance ($M) | | :--- | :--- | :--- | :--- | :--- | | 2019 | $57.2 | $25.5 | $30.3 | $52.4 | | 2018 | $12.0 | $51.4 | $6.2 | $57.2 | | 2017 | $6.9 | $6.3 | $1.2 | $12.0 | [Form 10-K Summary](index=73&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that no Form 10-K summary is provided - None provided[356](index=356&type=chunk)

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]