BENSALEM, Pa., Feb. 12 /PRNewswire-FirstCall/ -- Healthcare Services
Group, Inc. (Nasdaq: HCSG) reported that revenues for the three months ended
December 31, 2003 increased 20% to $101,503,000 compared to $84,457,000 for
the same 2002 period. Net income for the three months ended December 31, 2003
increased 30% to $2,850,000 or $.25 per basic and $.24 per diluted common
share, compared to the 2002 fourth quarter net income of $2,195,000 or $.20
per basic and $.19 per diluted common share, representing increases of 25% and
26%, respectively.
The Company also reported that revenues for the year ended December 31,
2003 increased by 16% to $379,718,000 compared to $328,500,000 for the same
2002 period. Net income increased 26% for the year ended December 31, 2003 to
$10,860,000 or $.96 per basic and $.92 per diluted common share compared to
the year ended December 31, 2002 net income of $8,631,000 or $.77 per basic
and $.74 per diluted common share, representing increases of 25% and 24%,
respectively.
Additionally, the Board of Directors have declared a three-for-two stock
split in the form of a 50% stock dividend payable on March 1, 2004 to the
holders of its Common Stock of record as of the close of business February 23,
2004. All fractional share interests will be rounded up to the nearest whole
number. The effect of this action will be to increase common shares
outstanding by approximately 5,620,200 to approximately 16,860,800 shares.
On January 21, 2004, the Company announced a 2004 first quarter cash
dividend of $.08 per common share payable on February 13, 2004 to shareholders
of record at the close of business January 31, 2004.
Forward-Looking Statements/Risk Factors
Certain matters discussed may 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 approximately 23% of revenues in
2003; the Company's claims' experience related to workers' compensation and
general liability insurance; the effects of changes in laws and regulations
governing the industry and risk factors described in the Company's most recent
Form 10-K filed with the Securities and Exchange Commission for the year ended
December 31, 2002 in Part I thereof under "Government Regulation of Clients,"
"Competition" and "Service Agreements/Collections." Many of our clients'
revenues are highly reliant 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 the Prospective Payment System
("PPS"). That change, and 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 also be adversely affected
if unexpected increases in 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, we believe to further improve our future 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 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
(Unaudited)
December 31, December 31,
2003 2002
------------ ------------
Cash and cash equivalents $64,181,000 $48,320,000
Accounts receivable, net 58,145,000 51,554,000
Prepaid income taxes - 883,000
Deferred income taxes current 2,017,000 3,022,000
Other current assets 13,768,000 10,999,000
Property and equipment 4,611,000 4,438,000
Deferred income taxes long-term 3,135,000 1,955,000
Other assets 12,471,000 13,125,000
$158,328,000 $134,296,000
Accrued insurance claims current $2,979,000 $1,953,000
Other current liabilities 25,214,000 18,602,000
Accrued insurance claims long-term 8,937,000 5,860,000
Stockholders' equity 121,198,000 107,881,000
$158,328,000 $134,296,000
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Year Ended
December 31,
2003 2002
------------ ------------
Revenues $379,718,000 $328,500,000
Operating costs and expenses:
Cost of services provided 334,609,000 289,859,000
Selling, general and
administrative 29,045,000 25,147,000
Other income:
Interest income 1,451,000 771,000
Income before income taxes 17,515,000 14,265,000
Income taxes 6,655,000 5,634,000
Net income $10,860,000 $8,631,000
Basic earnings per common share $.96 $.77
Diluted earnings per common share $.92 $.74
Weighted average number of common
shares outstanding for basic EPS 11,365,796 11,263,466
Weighted average number of common
shares outstanding for diluted EPS 11,858,868 11,689,498
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
December 31,
2003 2002
------------ -----------
Revenues $101,503,000 $84,457,000
Operating costs and expenses:
Cost of services provided 89,935,000 74,549,000
Selling, general and
administrative 7,759,000 6,554,000
Other income:
Interest income 692,000 271,000
Income before income taxes 4,501,000 3,625,000
Income taxes 1,651,000 1,430,000
Net income $2,850,000 $2,195,000
Basic earnings per common share $.25 $.20
Diluted earnings per common share $.24 $.19
Basic weighted average number of
common shares outstanding 11,505,478 11,255,065
Diluted weighted average number of
common shares outstanding 12,111,815 11,658,478
SOURCE Healthcare Services Group, Inc.
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Related links:
http://www.hcsgcorp.com
CONTACT:
Daniel P. McCartney, Chairman and Chief
Executive Officer, +1-215-639-4274; or Thomas Cook, President and
Chief Operating Officer, +1-215-639-4274, both of Healthcare
Services Group
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