Healthcare Services Group(US:HCSG)2025-04-25 20:02Revenue Performance - Consolidated revenues increased by 5.7% to $447.7 million for the three months ended March 31, 2025, compared to $423.4 million in the same period of 2024[164]. - Housekeeping revenues contributed approximately 43.9% or $196.3 million, while Dietary services accounted for approximately 56.1% or $251.3 million of total revenues for the three months ended March 31, 2025[157]. - Dietary revenues increased by 7.9% driven by new business additions and increases in contractual pass-through costs to customers[165]. Cost and Expense Analysis - Consolidated costs of services provided rose by 5.8% to $379.7 million, maintaining a consistent ratio of 84.8% of revenues for both periods[166]. - Selling, general and administrative expenses increased by 8.5% to $46.4 million, primarily due to rising payroll and payroll-related costs[172]. - Housekeeping segment expenses as a percentage of revenues increased to 89.2% from 88.9% year-over-year[167]. - Dietary segment expenses as a percentage of revenues decreased to 92.4% from 93.0% year-over-year[169]. Net Income and Taxation - Net income for the three months ended March 31, 2025, was $17.2 million, reflecting a 12.5% increase from $15.3 million in the prior year[160]. - For the three months ended March 31, 2025, the provision for income taxes was $6.7 million, with an effective tax rate of 27.9%, compared to $6.0 million and 28.2% for the same period in 2024[177]. Cash Flow and Financial Position - Net cash provided by operating activities for the three months ended March 31, 2025, was $27.5 million, a significant improvement from a cash outflow of $26.0 million in the same period of 2024[180]. - As of March 31, 2025, the company had cash, cash equivalents, and marketable securities totaling $114.8 million, an increase from $107.3 million at December 31, 2024[179]. - The company reported a net income of $17.2 million for the three months ended March 31, 2025, contributing to the positive cash flow from operations[181]. Debt and Capital Expenditures - The funded debt to EBITDA ratio was 0.19 as of March 31, 2025, well below the covenant requirement of less than 3.50 to 1.00[186]. - The company had $300 million available under a bank line of credit, with no borrowings as of March 31, 2025[185]. - The company estimates capital expenditures for 2025 to be approximately $5.0 million to $7.0 million, with $1.7 million spent through March 31, 2025[188]. Share Repurchase and Other Financial Activities - The company repurchased 0.7 million shares of common stock for $7.0 million during the three months ended March 31, 2025, under an authorized repurchase plan[184]. - The company had outstanding $48.0 million in irrevocable standby letters of credit related to insurance program payment obligations as of March 31, 2025[187]. - Investment and other income, net decreased to $1.3 million from $5.7 million, largely due to market fluctuations in trading security investments[174]. - Interest expense decreased significantly to $0.4 million from $2.0 million due to lower average borrowings on the line of credit[176]. - The fair value of cash equivalents and marketable securities was determined based on "Level 1" or "Level 2" inputs, totaling $143.9 million as of March 31, 2025[195].