Healthcare Services Group(HCSG) - 2025 Q3 - Quarterly Results

Financial Performance - Revenue for Q3 2025 was reported at $464.3 million, an 8.5% increase year-over-year[5] - Net income for Q3 2025 was $43.0 million, with diluted EPS of $0.59, including a $0.36 benefit related to the Employee Retention Credit (ERC)[5] - GAAP net income for Q3 2025 was $42,953,000, compared to $14,030,000 in Q3 2024, representing a significant increase[25] - Adjusted EBITDA for Q3 2025 reached $56,393,000, up from $24,806,000 in Q3 2024, indicating strong operational performance[25] - Adjusted EBITDA as a percentage of revenue improved to 12.1% in Q3 2025, compared to 5.8% in Q3 2024[25] - For the nine months ended September 30, 2025, GAAP net income was $27,815,000, compared to $27,551,000 for the same period in 2024[25] - Adjusted EBITDA for the nine months ended September 30, 2025, was $49,372,000, slightly down from $56,079,000 in the previous year[25] Cash Flow and Expenses - Cash flow from operations was $71.3 million, or $87.1 million excluding payroll accrual changes, including a $31.8 million benefit from the ERC[5][7] - Cash flows from operations (excluding payroll accrual changes) for Q3 2025 were $87,092,000, compared to $18,994,000 in Q3 2024, reflecting improved cash generation[25] - GAAP cash flows provided by operations for Q3 2025 were $71,293,000, a substantial increase from $4,312,000 in Q3 2024[25] - The accrued payroll adjustment reflects changes in payroll timing, impacting cash flow performance but not indicative of overall quarterly performance[26] - Cost of services was $367.9 million, representing 79.2% of revenue, with a goal to manage costs in the 86% range[6] - Selling, general and administrative expenses (SG&A) were $50.5 million, or 10.1% of revenue, with a near-term management goal of 9.5% to 10.5%[6] Segment Performance - Environmental Services segment margin was reported at 10.7%, while Dietary Services segment margin was 5.1%[6] Assets and Share Repurchases - The company had cash and marketable securities totaling $207.5 million and a $500.0 million credit facility as of the end of Q3 2025[8] - Year-to-date share repurchases totaled $42.0 million, with $27.3 million repurchased in Q3 2025[9] Strategic Outlook - The company aims to continue executing strategic priorities to drive growth and deliver sustainable, profitable results[3] - Upcoming presentations include the UBS Global Healthcare Conference on November 11, 2025, and the Evercore Healthcare Conference on December 3, 2025[11] Depreciation and Amortization - The company reported a depreciation and amortization expense of $4,029,000 for Q3 2025, compared to $3,773,000 in Q3 2024[25] - The right-of-use asset depreciation for Q3 2025 was $2.1 million, compared to $2.0 million in Q3 2024[25]