BENSALEM, Pa., Feb. 12 /PRNewswire-FirstCall/ --
Healthcare Services Group, Inc. (Nasdaq: HCSG) reported that revenues for the
three months ended December 31, 2002 increased 11% to $84,457,000 compared to
$75,796,000 for the same 2001 period. Net income for the three months ended
December 31, 2002 increased l8% to $2,195,000 or $.20 per basic and $.19 per
diluted common share, compared to the 2001 fourth quarter net income of
$1,864,000 or $.17 per basic and diluted common share, representing increases
of 18% and 12%, respectively.
The Company also reported that revenues for the year ended December 31,
2002 increased by 16% to $328,500,000 compared to $284,190,000 for the same
2001 period. Net income increased 23% for the year ended December 31, 2002 to
$8,631,000 or $.77 per basic and $.74 per diluted common share compared to the
year ended December 31, 2001 net income of $7,035,000 or $.64 per basic and
diluted common share, representing increases of 20% and 16%, respectively.
Forward Looking Statements/Risk Factors
Certain matters discussed include forward-looking statements that are
subject to risks and uncertainties that could cause actual results or
objectives to differ materially from those projected. The Company undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. Such
risks and uncertainties include, but are not limited to, risks arising from
the Company providing its 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 17% of revenue in 2002; the
Company's claims experience related to workers' compensation and general
liability insurance; the effects of changes in regulations governing the
industry and risk factors described in the Company's Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 2001 in
Part I thereof under "Government Regulation of Clients", "Competition" and
"Service Agreements/Collections." Many of the Company's clients' revenues are
highly contingent on Medicare and Medicaid reimbursement funding rates, which
have been and continue to be adversely affected by the change in Medicare
payments under the 1997 enactment of Prospective Payment System ("PPS"). That
change, and the lack of substantive reimbursement funding rate reform
legislation, as well as other trends in the long-term care industry have
resulted in certain of the Company's clients filing for bankruptcy protection.
Others may follow. Any decisions by the government to discontinue or
adversely modify legislation related to reimbursement funding rates will have
a material adverse affect on the Company's clients. 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, the Company's 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 its services could not be passed on
to clients.
In addition, the Company believes that to improve its financial
performance it 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 the various operational levels of the Company.
Furthermore, the Company believes that its 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.
HEALTHCARE SERVICES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2002 2001
Cash and cash equivalents $48,320,000 $34,259,000
Accounts receivable, net 51,750,000 54,076,000
Prepaid income taxes 883,000 8,000
Deferred income taxes 3,022,000 2,163,000
Other current assets 10,803,000 10,101,000
Property and equipment 4,438,000 4,762,000
Cost in excess of fair value of net
assets acquired 1,612,000 1,612,000
Deferred income taxes 1,955,000 1,523,000
Other assets 11,513,000 12,286,000
$134,296,000 $120,790,000
Accrued insurance claims current $1,953,000 $1,156,000
Other current liabilities 18,602,000 16,344,000
Accrued insurance claims 5,860,000 4,347,000
Stockholders' equity 107,881,000 98,943,000
$134,296,000 $120,790,000
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Year Ended
December 31,
2002 2001
Revenues $328,500,000 $284,190,000
Operating costs and expenses:
Cost of services provided 289,859,000 252,030,000
Selling, general and
administrative 25,148,000 21,872,000
Other income:
Interest income 772,000 1,247,000
Income before income taxes 14,265,000 11,535,000
Income taxes 5,634,000 4,500,000
Net income $8,631,000 $7,035,000
Basic earnings per common share $.77 $.64
Diluted earnings per common share $.74 $.64
Weighted average number of common
shares outstanding for basic EPS 11,263,466 10,928,281
Weighted average number of common
shares outstanding for diluted EPS 11,689,498 11,077,946
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months Ended
December 31,
2002 2001
Revenues $84,457,000 $75,796,000
Operating costs and expenses:
Cost of services provided 74,549,000 67,388,000
Selling, general and
administrative 6,554,000 5,755,000
Other income:
Interest income 271,000 403,000
Income before income taxes 3,625,000 3,056,000
Income taxes 1,430,000 1,192,000
Net income $2,195,000 $1,864,000
Basic earnings per common share $.20 $.17
Diluted earnings per common share $.19 $.17
Basic weighted average number of
common shares outstanding 11,255,065 10,963,972
Diluted weighted average number of
common shares outstanding 11,658,478 11,248,261
SOURCE Healthcare Services Group, Inc.
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Related links:
http://www.hcsgcorp.com
CONTACT:
Daniel P. McCartney, Chairman and Chief
Executive Officer or Thomas Cook, President and Chief Operating
Officer, +1-215-639-4274, both of Healthcare Services Group
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