Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - HEALTHCARE SERVICES GROUP INC | w75922e8vk.htm |
Exhibit 99.1
HEALTHCARE SERVICES GROUP, INC. REPORTS RESULTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009
AND DECLARES INCREASED THIRD QUARTER 2009 CASH DIVIDEND
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009
AND DECLARES INCREASED THIRD QUARTER 2009 CASH DIVIDEND
Bensalem, PA — October 13, 2009, Healthcare Services Group, Inc. (NASDAQ-HCSG) reported that
revenues for the three months ended September 30, 2009 increased 17% to $178,829,000 compared to
$152,978,000 for the same 2008 period. Net income for the three months ended September 30, 2009
increased 49% to $8,225,000 or $.19 per basic and per diluted common share, compared to the 2008
third quarter net income of $5,522,000 or $.13 per basic and per diluted common share.
Revenues for the nine months ended September 30, 2009 increased 14% to $510,134,000 compared
to $448,155,000 for the same 2008 period. Net income for the nine months ended September 30, 2009
increased 23% to $23,776,000 or $.55 per basic and $.54 per diluted common share compared to the
2008 nine month period net income of $19,331,000 or $.45 per basic and $.44 per diluted common
share.
The Board of Directors has declared a third quarter 2009 regular quarterly cash dividend of
$.20 per common share, payable on November 6, 2009 to shareholders of record at the close of
business October 23, 2009. This represents over a 5% increase over the dividend declared for the
2009 second quarter and a 25% increase over the 2008 same period payment. It is the 26th
consecutive regular quarterly cash dividend payment, as well as the 25th consecutive increase since
our initiation of regular quarterly cash dividend payments in 2003.
The Company will host a conference call on October 14, 2009 at 8:30 AM Eastern Time to discuss
its results for the three and nine month periods ended September 30, 2009. The call in numbers are
888-208-1625 and 913-312-0865 (passcode #6074013).
| 3rd Quarter 2009 Earnings Release | October 13, 2009 | |
| Page 2 |
Cautionary Statement Regarding Forward-Looking Statements
This release and any schedules incorporated by reference into this report contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, are not historical
facts but rather based on current expectations, estimates and projections about our business and
industry, our beliefs and assumptions. Words such as “believes”, “anticipates”, “plans”, “expects”,
“will”, “goal”, and similar expressions are intended to identify forward-looking statements. The
inclusion of forward-looking statements should not be regarded as a representation by us that any
of our plans will be achieved. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
Such forward looking information is also subject to various risks and uncertainties. Such risks and
uncertainties include, but are not limited to, risks arising from our providing services
exclusively to the health care industry, primarily providers of long-term care; credit and
collection risks associated with this industry; one client accounting for approximately 13% of
revenues in the nine month period ended September 30, 2009; risks associated with our acquisition
of Contract Environmental Services, Inc., including integration risks and costs, or such business
not achieving expected financial results or synergies or failure to otherwise perform as expected;
our claims experience related to workers’ compensation and general liability insurance; the effects
of changes in, or interpretations of laws and regulations governing the industry, our workforce and
services provided, including state and local regulations pertaining to the taxability of our
services; and the risk factors described in our Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 2008 in Part I
| 3rd Quarter 2009 Earnings Release | October 13, 2009 | |
| Page 3 |
under “Government Regulation of Clients”, “Competition”, “Service Agreements/Collections”, and
under Item IA “Risk Factors”. Many of our clients’
revenues are highly contingent on Medicare and Medicaid reimbursement funding rates, which Congress
has affected through the enactment of a number of major laws during the past decade. These laws
have significantly altered, or threatened to alter, overall government reimbursement funding rates
and mechanisms. The overall effect of these laws and trends in the long-term care industry have
affected and could adversely affect the liquidity of our clients, resulting in their inability to
make payments to us on agreed upon payment terms. These factors, in addition to delays in payments
from clients, have
resulted in, and could continue to result in, significant additional bad debts in the near
future. Additionally, our operating results would be adversely affected if unexpected increases in
the costs of labor and labor related costs, materials, supplies and equipment used in performing
services could not be passed on to our clients.
In addition, we believe that to improve our financial performance we must continue to obtain
service agreements with new clients, provide new services to existing clients, achieve modest price
increases on current service agreements with existing clients and maintain internal cost reduction
strategies at our various operational levels. Furthermore, we believe that our ability to sustain
the internal development of managerial personnel is an important factor impacting future operating
results and successfully executing projected growth strategies.
Healthcare Services Group, Inc. is the largest national provider of professional housekeeping,
laundry and food services to long-term care and related facilities.
Company Contacts: |
||
Daniel P. McCartney
|
Thomas Cook | |
Chairman and Chief Executive Officer
|
President | |
215-639-4274
|
215-639-4274 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Unaudited)
| September 30, 2009 | December 31, 2008 | |||||||
Cash and cash equivalents |
$ | 37,437,000 | $ | 37,501,000 | ||||
Marketable securities, net |
51,594,000 | 49,414,000 | ||||||
Accounts receivable, net |
104,721,000 | 96,558,000 | ||||||
Other current assets |
23,881,000 | 23,142,000 | ||||||
Total current assets |
217,633,000 | 206,615,000 | ||||||
Property and equipment, net |
4,265,000 | 3,929,000 | ||||||
Notes receivable- long term, net |
5,394,000 | 3,201,000 | ||||||
Goodwill, net |
17,054,000 | 15,020,000 | ||||||
Other Intangible Assets, net |
9,319,000 | 5,033,000 | ||||||
Deferred compensation funding |
10,241,000 | 8,287,000 | ||||||
Other assets |
7,781,000 | 6,476,000 | ||||||
Total Assets |
$ | 271,687,000 | $ | 248,561,000 | ||||
Accrued insurance claims- current |
$ | 4,802,000 | $ | 3,943,000 | ||||
Other current liabilities |
35,823,000 | 25,099,000 | ||||||
Total current liabilities |
40,625,000 | 29,042,000 | ||||||
Accrued insurance claims- long term |
11,206,000 | 9,201,000 | ||||||
Deferred compensation liability |
10,484,000 | 8,636,000 | ||||||
Stockholders’ equity |
209,372,000 | 201,682,000 | ||||||
Total Liabilities and Stockholders’ Equity |
$ | 271,687,000 | $ | 248,561,000 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Unaudited)
| For the Three Months Ended | ||||||||
| September 30, | ||||||||
| 2009 | 2008 | |||||||
Revenues |
$ | 178,829,000 | $ | 152,978,000 | ||||
Operating costs and expenses: |
||||||||
Cost of services provided |
155,228,000 | 134,228,000 | ||||||
Selling, general and administrative |
11,936,000 | 9,615,000 | ||||||
Income from operations |
11,665,000 | 9,135,000 | ||||||
Other income: |
||||||||
Investment and interest income |
1,709,000 | (157,000 | ) | |||||
Income before income taxes |
13,374,000 | 8,978,000 | ||||||
Income taxes |
5,149,000 | 3,456,000 | ||||||
Net income |
$ | 8,225,000 | $ | 5,522,000 | ||||
Basic earnings per common share |
$ | .19 | $ | .13 | ||||
Diluted earnings per common share |
$ | .19 | $ | .13 | ||||
Cash dividends per common share |
$ | .19 | $ | .15 | ||||
Basic weighted average number of
common shares outstanding |
43,626,000 | 43,143,000 | ||||||
Diluted weighted average number of
common shares outstanding |
44,334,000 | 43,980,000 | ||||||
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(Unaudited)
| For the Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2009 | 2008 | |||||||
Revenues |
$ | 510,134,000 | $ | 448,155,000 | ||||
Operating costs and expenses: |
||||||||
Cost of services provided |
438,950,000 | 387,157,000 | ||||||
Selling, general and administrative |
36,328,000 | 30,318,000 | ||||||
Income from operations |
34,856,000 | 30,680,000 | ||||||
Other income: |
||||||||
Investment and interest income |
3,803,000 | 753,000 | ||||||
Income before income taxes |
38,659,000 | 31,433,000 | ||||||
Income taxes |
14,883,000 | 12,102,000 | ||||||
Net income |
$ | 23,776,000 | $ | 19,331,000 | ||||
Basic earnings per common share |
$ | .55 | $ | .45 | ||||
Diluted earnings per common share |
$ | .54 | $ | .44 | ||||
Cash dividends per common share |
$ | .54 | $ | .42 | ||||
Basic weighted average number of
common shares outstanding |
43,540,000 | 43,078,000 | ||||||
Diluted weighted average number of
common shares outstanding |
44,224,000 | 44,050,000 | ||||||