Healthcare Services Group(US:HCSG)2021-04-23 21:09Revenue Performance - Consolidated revenues decreased by 9.2% to $407.8 million for the three months ended March 31, 2021, compared to $449.2 million for the same period in 2020[149]. - Housekeeping revenues decreased by 4.1% to $215.1 million, while Dietary revenues decreased by 14.3% to $192.7 million for the three months ended March 31, 2021[150]. - COVID-19 supplemental billings contributed $3.9 million to revenues for the quarter ended March 31, 2021, primarily related to employee pay premiums[134]. Cost Management - Consolidated costs of services provided decreased by 13.1% to $336.6 million for the three months ended March 31, 2021, compared to $387.2 million for the same period in 2020[151]. - The costs of services provided for Housekeeping decreased to 86.9% of Housekeeping revenues, down from 89.3% in the corresponding period in 2020[153]. - Dietary labor and other labor-related costs were 63.4% of Dietary revenues for the three months ended March 31, 2021, a slight decrease from 63.6% in the same period in 2020[154]. Expenses - Selling, general and administrative expenses increased by $2.9 million or 8.1% for the three months ended March 31, 2021, primarily due to increased payroll costs and higher legal fees[156]. - Selling, general and administrative expenses increased by 33.2% to $39.987 million for the three months ended March 31, 2021, compared to $30.017 million in the same period of 2020[157]. Financial Position - Cash, cash equivalents, and marketable securities totaled $249.4 million at March 31, 2021, down from $264.3 million at December 31, 2020[162]. - The company has a $475 million bank line of credit with no borrowings as of March 31, 2021, and is in compliance with its financial covenants[171][172]. - The company remains authorized to repurchase 1.7 million shares of common stock, having purchased 9,000 shares for a total cost of $259,000 after March 31, 2021[170]. Income and Taxation - Investment and other income rose by 144.9% to $2.2 million for the three months ended March 31, 2021, primarily due to market fluctuations in trading security investments[158]. - Consolidated interest expense decreased by 2.7% to $0.4 million for the three months ended March 31, 2021, due to fewer interquarter borrowings[159]. - The provision for income taxes was $8.3 million with a 25.2% effective tax rate for the three months ended March 31, 2021, compared to $6.6 million and a 24.6% effective tax rate in the same period of 2020[160]. Cash Flow - Net cash provided by operating activities was $3.502 million for the three months ended March 31, 2021, compared to $12.688 million in the same period of 2020[163]. - The company expects to continue paying regular quarterly cash dividends, having paid $15.5 million in dividends during the first quarter of 2021[168]. Litigation and Risks - The Company is actively defending against all ongoing litigation claims, which may result in substantial costs and affect business conditions[192]. - Uncertainties from pending lawsuits could lead to increased volatility and a potential reduction in the Company's stock price[192]. - The ultimate outcome of litigation matters could materially impact the Company's results of operations depending on the size of the loss or liability and the level of operating income[193]. Capital Expenditures - Capital expenditures for 2021 are estimated to be between $4.0 million and $6.0 million, with $0.9 million spent through March 31, 2021[176]. Liquidity - The company maintained operating cash flows to meet short-term liquidity needs and did not observe material impairments of assets due to the COVID-19 pandemic[136].