Healthcare Services Group(HCSG)2024-10-25 20:03Revenue Performance - Consolidated revenues increased by 4.1% to 411.4 million for the same period in 2023[144]. - Consolidated revenues increased to 1,247.5 million for the same period in 2023, representing a 2.4% increase[162]. - Housekeeping revenues increased by 0.1% to 237.0 million for the three months ended September 30, 2024[140][145]. - Dietary revenues increased by 4.9% 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 376.9 million for the same period in 2023[146]. - Consolidated costs of services provided increased by 0.1% 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 39.0 million for the same period in 2023[150][152]. - Selling, general and administrative expenses increased by 14.7% to 120.5 million for the same period in 2023[169]. Income and Taxation - Investment and other income, net was a gain of 0.4 million in the corresponding 2023 period[153]. - Investment and other income, net was 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 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 147.5 million at December 31, 2023, while working capital increased to 354.8 million[175]. - The company reported net cash used in operating activities of (5,947) thousand for the same period in 2023[176]. - The company had a 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 7.0 million, with 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].