Healthcare Services Group(US:HCSG)2025-10-24 20:02Revenue Performance - Consolidated revenues increased by 8.5% to $464.3 million for the three months ended September 30, 2025, compared to $428.1 million in the same period of 2024[179]. - Housekeeping revenues rose by 10.8% to $211.8 million, while Dietary revenues increased by 6.5% to $252.6 million for the three months ended September 30, 2025[174][180]. - Consolidated revenues increased by 7.2% to $1,370.5 million for the nine months ended September 30, 2025, compared to $1,277.9 million for the same period in 2024[200]. - Housekeeping revenues rose by 7.2% to $613.9 million, while Dietary revenues increased by 7.3% to $756.6 million during the nine months ended September 30, 2025[201]. Income and Profitability - Net income for the three months ended September 30, 2025, was $42.9 million, a 206.2% increase from $14.0 million in the corresponding period of 2024[174]. - Investment and other income, net was $11.8 million for the three months ended September 30, 2025, compared to $3.8 million in the same period of 2024, reflecting favorable market fluctuations[190]. - Investment and other income, net was a gain of $17.9 million for the nine months ended September 30, 2025, compared to a gain of $12.1 million in 2024[211]. Cost Management - Costs of services provided as a percentage of revenues decreased to 79.2% for the three months ended September 30, 2025, down from 85.2% in the same period of 2024[181]. - The company aims to manage consolidated costs of services provided as a percentage of revenues in the 86% range for the full year[181]. - Consolidated costs of services provided increased by 8.6% to $1,203.2 million, excluding the impact of $34.2 million in ERC refunds[202]. - The ratio of costs of services provided to consolidated revenues was 87.8% for the nine months ended September 30, 2025, compared to 86.7% in 2024[199]. Expenses - Selling, general and administrative expenses increased by 7.8% to $50.5 million for the three months ended September 30, 2025, compared to $46.9 million in the same period of 2024[189]. - Consolidated selling, general and administrative expense increased by 5.6% to $137.8 million, excluding changes in deferred compensation plan liability[209]. - Bad debt expense related to large customer bankruptcies was $63.9 million for the nine months ended September 30, 2025, compared to $17.6 million in 2024[203]. Cash Flow and Liquidity - For the nine months ended September 30, 2025, net cash provided by operating activities was $127.6 million, compared to a net cash used of $5.4 million in the same period of 2024[216]. - Cash flow from operations included $27.8 million in net income and $112.4 million in non-cash add-backs, along with a $12.7 million increase in cash flows from changes in operating assets and liabilities[218]. - As of September 30, 2025, the company had cash, cash equivalents, and marketable securities totaling $177.5 million, an increase from $107.3 million at December 31, 2024[215]. - As of September 30, 2025, the company had $207.5 million in cash and cash equivalents, restricted cash equivalents, marketable securities, and restricted marketable securities[233]. Shareholder Returns - The company repurchased 2.9 million shares of common stock for $42.1 million during the nine months ended September 30, 2025, compared to 0.4 million shares for $4.0 million in the same period of 2024[221]. Financial Ratios and Compliance - The funded debt to EBITDA ratio was 0.18 as of September 30, 2025, well below the required limit of less than 3.50 to 1.00[224]. - The company had a current ratio of 3.0 to 1.0 at September 30, 2025, compared to 2.9 to 1.0 at December 31, 2024[215]. - The provision for income taxes was $11.5 million for the nine months ended September 30, 2025, with an effective tax rate of 29.2%[214]. - The company expects to remain in compliance with its financial covenants and believes existing liquidity will be adequate for operations in the foreseeable future[227]. Capital Expenditures - Capital expenditures for 2025 are estimated to be between $5.0 million and $7.0 million, with $4.4 million spent through September 30, 2025[226]. - The company had no borrowings under its $300 million line of credit as of September 30, 2025, which expires on November 22, 2027[223].