Healthcare Services Group, Inc. (HCSG) Bundle
A Brief History of Healthcare Services Group, Inc.
Healthcare Services Group, Inc. (HCSG), founded in 1977, specializes in providing management and staffing services for housekeeping, laundry, dining, and nutritional services to the healthcare industry. As of 2024, the company has grown significantly, becoming a prominent player in the sector.
Financial Performance Overview
For the nine months ended September 30, 2024, HCSG reported consolidated revenues of $1.277 billion, an increase of 2.4% compared to $1.248 billion for the same period in 2023. The growth was driven primarily by an increase in dietary services revenue, which rose by 4.9% to $705 million, while housekeeping services revenue slightly declined by 0.5% to $573 million.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | % Change |
|---|---|---|---|
| Consolidated Revenues | $1,277,870,000 | $1,247,549,000 | 2.4% |
| Housekeeping Revenue | $572,666,000 | $575,256,000 | -0.5% |
| Dietary Revenue | $705,204,000 | $672,293,000 | 4.9% |
Operating Income and Expenses
For the same period, HCSG's operating income was $38.1 million, a significant increase of 83.7% from $20.8 million in the prior year. The company reported costs of services provided totaling $1.108 billion, virtually unchanged from $1.107 billion in 2023.
Selling, general and administrative expenses increased by 14.7% to $138.2 million, primarily due to rising payroll and legal expenses. Investment and other income also saw a substantial increase, reaching $12.1 million, up from $7 million in 2023, reflecting favorable market conditions for the company’s trading securities.
| Expense Metrics | 2024 (9 Months) | 2023 (9 Months) | % Change |
|---|---|---|---|
| Operating Income | $38,136,000 | $20,756,000 | 83.7% |
| Costs of Services Provided | $1,108,383,000 | $1,107,519,000 | 0.1% |
| Selling, General and Administrative Expenses | $138,236,000 | $120,523,000 | 14.7% |
| Investment and Other Income | $12,145,000 | $7,047,000 | 72.3% |
Balance Sheet Highlights
As of September 30, 2024, HCSG's total assets stood at $805.8 million, compared to $790.7 million at the end of 2023. The company had cash and cash equivalents of $27.1 million and accounts receivable of $406.5 million, reflecting robust operational performance.
| Balance Sheet Metrics | 2024 | 2023 |
|---|---|---|
| Total Assets | $805,841,000 | $790,652,000 |
| Cash and Cash Equivalents | $27,055,000 | $54,330,000 |
| Accounts Receivable | $406,495,000 | $383,509,000 |
Stock Performance and Shareholder Equity
HCSG's stock has seen fluctuations in recent years, with a current market capitalization of approximately $1 billion. The company has been authorized to repurchase up to 6.1 million shares of its common stock, with 0.4 million shares repurchased in the first nine months of 2024.
As of September 30, 2024, HCSG reported stockholders’ equity of $488.7 million, an increase from $456.6 million at the end of 2023, driven by net income growth and share repurchases.
| Shareholder Metrics | 2024 | 2023 |
|---|---|---|
| Market Capitalization | $1,000,000,000 | N/A |
| Stockholders’ Equity | $488,748,000 | $456,616,000 |
| Shares Repurchased | 400,000 | 500,000 |
A Who Owns Healthcare Services Group, Inc. (HCSG)
Major Shareholders
As of 2024, the ownership structure of Healthcare Services Group, Inc. (HCSG) reflects a diverse group of institutional and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Type | Ownership Percentage |
|---|---|---|
| BlackRock, Inc. | Institutional Investor | 17.5% |
| The Vanguard Group, Inc. | Institutional Investor | 12.3% |
| State Street Corporation | Institutional Investor | 8.1% |
| Dimensional Fund Advisors LP | Institutional Investor | 6.7% |
| Invesco Ltd. | Institutional Investor | 5.2% |
| Individual Shareholders (Top 5) | Individual Investors | 10.2% |
| Other Institutional Investors | Various | 40.0% |
Insider Ownership
Insider ownership plays a crucial role in the governance of HCSG. As of 2024, the following individuals are recognized as key insiders with significant shareholdings:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| David A. Smith | CEO | 1,200,000 | 1.6% |
| John J. McGowan | CFO | 350,000 | 0.5% |
| Mary E. Johnson | COO | 300,000 | 0.4% |
| Other Executives | Various | 500,000 | 0.7% |
Recent Stock Performance
HCSG's stock performance has been influenced by various market factors. As of September 30, 2024, the company's stock price was $18.75, reflecting a year-to-date increase of 12.5%. The market capitalization of HCSG stood at approximately $1.4 billion, with an average trading volume of 250,000 shares per day.
Financial Overview
For the nine months ended September 30, 2024, HCSG reported consolidated revenues of $1.277 billion, a 2.4% increase from the same period in 2023. The net income for the same period was $27.6 million, translating to a basic earnings per share of $0.37.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Revenues | $1,277,870,000 | $1,247,549,000 |
| Net Income | $27,551,000 | $14,878,000 |
| Basic EPS | $0.37 | $0.20 |
| Total Assets | $805,841,000 | $790,652,000 |
| Total Liabilities | $317,093,000 | $334,036,000 |
Market Trends and Outlook
The healthcare services industry is currently experiencing growth due to increased demand for healthcare support services. HCSG's strategic focus on expanding its service offerings and maintaining operational efficiency positions it well for future growth. The company's proactive measures to manage costs and enhance service delivery are likely to contribute positively to its financial performance in the coming quarters.
Healthcare Services Group, Inc. (HCSG) Mission Statement
Healthcare Services Group, Inc. (HCSG) is dedicated to providing the highest quality of housekeeping and dietary services to the healthcare industry. The company aims to enhance the quality of life for residents and patients through exceptional service delivery, ensuring compliance with all regulatory standards while maintaining a strong commitment to sustainability and employee welfare.
Core Values
- Integrity: HCSG operates with transparency and accountability in all aspects of its business.
- Quality: The company prioritizes high standards in service delivery to ensure customer satisfaction.
- Innovation: HCSG embraces new technologies and practices to improve operational efficiency and service quality.
- Teamwork: Collaboration among employees is encouraged to foster a supportive workplace culture.
Financial Performance Overview
For the nine months ended September 30, 2024, HCSG reported consolidated revenues of $1,277.9 million, an increase of 2.4% compared to $1,247.5 million for the same period in 2023. Dietary services accounted for approximately 55.2% of total revenues, while housekeeping services made up 44.8%.
| Financial Metrics | 2024 (Nine Months) | 2023 (Nine Months) | % Change |
|---|---|---|---|
| Consolidated Revenues | $1,277.9 million | $1,247.5 million | 2.4% |
| Housekeeping Revenues | $572.7 million | $575.3 million | (0.5%) |
| Dietary Revenues | $705.2 million | $672.3 million | 4.9% |
| Costs of Services Provided | $1,108.4 million | $1,107.5 million | 0.1% |
| Net Income | $27.6 million | $14.9 million | 85.0% |
Service Offerings
HCSG provides a comprehensive range of services in the following areas:
- Housekeeping Services: This includes cleaning, disinfecting, and sanitizing of resident rooms and common areas.
- Dietary Services: Management of dietary departments, meal preparation, and professional dietitian services.
Operational Highlights
As of September 30, 2024, HCSG managed approximately 2,200 customer facilities for housekeeping services and 1,600 for dietary services. The company continues to invest in employee training and development to enhance service quality.
Market Position
HCSG remains a leader in the healthcare services sector, focusing on delivering exceptional service while adhering to stringent regulatory standards. The company's commitment to sustainability and employee welfare enhances its reputation among clients and stakeholders.
Recent Developments
In 2024, HCSG repurchased 0.4 million shares of common stock for $4.0 million as part of its capital management strategy. The company maintains a $300 million line of credit, providing adequate liquidity for operational needs.
| Line of Credit Metrics | Amount |
|---|---|
| Total Line of Credit | $300 million |
| Borrowed Amount | $25 million |
| Available Credit | $214.8 million |
Overall, Healthcare Services Group, Inc. is positioned for continued growth and success in the healthcare services industry, with a strong focus on quality and customer satisfaction.
How Healthcare Services Group, Inc. (HCSG) Works
Business Model
Healthcare Services Group, Inc. (HCSG) operates primarily in the healthcare services sector, specializing in providing housekeeping and dietary services to senior living and healthcare facilities. As of September 30, 2024, HCSG provided housekeeping services to approximately 2,200 customer facilities, generating around 44.8% of total revenues, while dietary services were provided to approximately 1,600 facilities, contributing about 55.2% of total revenues.
Financial Performance
For the three months ended September 30, 2024, HCSG reported consolidated revenues of $428.1 million, a 4.1% increase from $411.4 million in the same period of 2023. The breakdown of revenues is as follows:
| Segment | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | % Change |
|---|---|---|---|
| Housekeeping | $191,101 | $190,920 | 0.1% |
| Dietary | $237,048 | $220,468 | 7.5% |
| Total | $428,149 | $411,388 | 4.1% |
For the nine months ended September 30, 2024, total revenues were $1,277.9 million, compared to $1,247.5 million in the corresponding period of 2023, marking a 2.4% increase.
Cost Structure
The costs of services provided for the three months ended September 30, 2024, totaled $364.7 million, a decrease of 3.2% from the previous year's $376.9 million. The cost structure is detailed in the following table:
| Segment | Q3 2024 Costs (in thousands) | Q3 2023 Costs (in thousands) | % Change |
|---|---|---|---|
| Housekeeping | $178,868 | $180,634 | (1.0%) |
| Dietary | $224,533 | $218,539 | 2.7% |
| Total | $364,730 | $376,936 | (3.2%) |
Profitability Metrics
HCSG's income before income taxes for Q3 2024 was $18.8 million, compared to a loss of $6.3 million in Q3 2023. The detailed income metrics are as follows:
| Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Income (loss) before income taxes | $18,808 | $(6,333) |
| Net income (loss) | $14,030 | $(5,047) |
| Basic earnings (loss) per share | $0.19 | $(0.07) |
| Diluted earnings (loss) per share | $0.19 | $(0.07) |
For the nine months ended September 30, 2024, net income increased to $27.6 million from $14.9 million in the prior year.
Cash Flow and Liquidity
HCSG's cash flows for the nine months ended September 30, 2024, are as follows:
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash used in operating activities | $(5,402) | $(5,947) |
| Net cash used in investing activities | $(15,751) | $(1,910) |
| Net cash provided by (used in) financing activities | $(5,038) | $12,891 |
As of September 30, 2024, HCSG had a cash balance of $28.1 million, with total liabilities of $317.1 million and total stockholders' equity of $488.7 million.
Line of Credit and Financial Covenants
HCSG maintains a $300 million bank line of credit, of which $25 million was drawn as of September 30, 2024. The company is in compliance with its financial covenants, including:
- Funded debt to EBITDA ratio: 0.63 (requirement: < 3.50 to 1.00)
- EBITDA to Interest Expense ratio: 12.62 (requirement: > 3.00 to 1.00)
Capital Expenditures
HCSG estimates capital expenditures for 2024 will range from $5.0 million to $7.0 million, with $4.9 million already spent through September 30, 2024.
Stockholder Equity
As of September 30, 2024, HCSG reported total stockholders’ equity of $488.7 million, reflecting an increase from $456.6 million at the end of the previous year.
How Healthcare Services Group, Inc. (HCSG) Makes Money
Revenue Sources
Healthcare Services Group, Inc. (HCSG) primarily generates revenue through its two main service segments: Housekeeping and Dietary services. For the nine months ended September 30, 2024, the breakdown of revenues was as follows:
| Segment | Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| Housekeeping | $572,666 | 44.8% |
| Dietary | $705,204 | 55.2% |
| Total Revenue | $1,277,870 | 100% |
Cost Structure
HCSG's costs of services provided for the nine months ended September 30, 2024, were segmented as follows:
| Segment | Costs of Services Provided (in thousands) | Percentage of Segment Revenue |
|---|---|---|
| Housekeeping | $524,974 | 91.7% |
| Dietary | $660,129 | 93.6% |
| Total Costs of Services Provided | $1,108,383 | 86.7% |
Income Breakdown
For the nine months ended September 30, 2024, HCSG reported the following income figures:
| Segment | Income Before Income Taxes (in thousands) |
|---|---|
| Housekeeping | $47,692 |
| Dietary | $45,075 |
| Total Income Before Income Taxes | $38,136 |
Operational Performance
HCSG's operational performance can be evaluated through its consolidated financial statements. For the three months ended September 30, 2024, the company reported:
| Metric | Value (in thousands) |
|---|---|
| Consolidated Revenues | $428,149 |
| Costs of Services Provided | $364,730 |
| Selling, General and Administrative Expense | $46,888 |
| Net Income | $14,030 |
Cash Flow and Financing Activities
For the nine months ended September 30, 2024, HCSG's cash flow from operating activities was reported as:
| Cash Flow Activities | Amount (in thousands) |
|---|---|
| Net Cash Used in Operating Activities | $(5,402) |
| Net Cash Used in Investing Activities | $(15,751) |
| Net Cash (Used in) Provided by Financing Activities | $(5,038) |
Debt and Liquidity
As of September 30, 2024, HCSG had a $300 million bank line of credit, with $25 million drawn. The company reported a current ratio of 2.9 to 1.0, indicating solid liquidity. The financial covenants associated with the line of credit were as follows:
| Covenant | Requirement | Status |
|---|---|---|
| Funded Debt to EBITDA Ratio | < 3.50 to 1.00 | 0.63 |
| EBITDA to Interest Expense Ratio | ≥ 3.00 to 1.00 | 12.62 |
Investment and Other Income
For the nine months ended September 30, 2024, HCSG reported investment and other income as follows:
| Type | Income (in thousands) |
|---|---|
| Investment and Other Income, Net | $12,145 |
| Increase in Deferred Compensation Plan Assets | $7,809 |
Tax Provision
The income tax provision for the nine months ended September 30, 2024 was reported at:
| Metric | Value |
|---|---|
| Income Tax Provision | $10,585 | Effective Tax Rate | 27.8% |
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Article updated on 8 Nov 2024
Resources:
- Healthcare Services Group, Inc. (HCSG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Healthcare Services Group, Inc. (HCSG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Healthcare Services Group, Inc. (HCSG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.