Healthcare Services Group(HCSG) - 2024 Q4 - Annual Results

Revenue Performance - Q4 2024 revenue was reported at $437.8 million, an increase from $423.8 million in Q4 2023, representing a growth of 3.4% year-over-year[19]. - The company expects mid-single digit revenue growth in 2025, with Q1 revenue projected to be between $440.0 million and $450.0 million[6]. Net Income and Earnings Per Share - Net income for Q4 2024 was $11.9 million, with diluted EPS of $0.16, compared to $23.5 million and $0.32 in Q4 2023, indicating a decrease of 49.3% in net income[19]. - GAAP net income for Q4 2024 was $11,920,000, a decrease from $23,508,000 in Q4 2023[22]. - For the year ended December 31, 2024, GAAP net income was $39,471,000, an increase from $38,386,000 in 2023[22]. Cash Flow - Cash flow from operations for Q4 2024 was $36.2 million, while actual cash flow, excluding payroll accrual changes, was $27.0 million[6]. - GAAP cash flows provided by operations for Q4 2024 were $36,204,000, a decrease from $49,445,000 in Q4 2023[22]. - Adjusted cash flows provided by operations for Q4 2024 were $26,957,000, slightly down from $27,882,000 in Q4 2023[22]. Cost Management - The cost of services for Q4 2024 was reported at $379.2 million, representing 86.6% of revenue, with a goal to manage this cost in the 86% range for 2025[7]. - Selling, general and administrative expenses (SG&A) were reported at $44.8 million, or 10.1% of revenue, with a target to reduce this to between 8.5% and 9.5% in 2025[7]. Assets and Securities - As of the end of Q4 2024, the company had cash and marketable securities totaling $135.8 million and a $500.0 million credit facility[5]. - Total assets as of December 31, 2024, were $802.8 million, an increase from $790.7 million at the end of 2023[20]. Profitability and Strategic Goals - The company aims to enhance profitability and maximize cash flow through strategic execution and strong business fundamentals into 2025 and beyond[3]. - The company has repurchased over $5.0 million of its common stock in 2024, continuing a share repurchase program initiated in February 2023[6]. Depreciation and Amortization - Total depreciation and amortization for the year ended December 31, 2024, was $14,585,000, compared to $14,344,000 in 2023[22]. - The right-of-use asset depreciation for Q4 2024 was $2,000,000, compared to $1,800,000 in Q4 2023[22]. Adjusted EBITDA - Adjusted EBITDA for Q4 2024 was $20,177,000, compared to $38,752,000 in Q4 2023, representing a decline of 48.0%[22]. - Adjusted EBITDA as a percentage of revenue for Q4 2024 was 4.6%, down from 9.1% in Q4 2023[22]. Payroll Adjustments - The company reported a decrease in accrued payroll adjustments, reflecting changes of $(9,247,000) for Q4 2024 and $(21,563,000) for Q4 2023[22]. - The company anticipates continuing to retain 100% of the funds received from SERP participants, impacting future cash flows[22].