-- Second Quarter Net Income Up 30% Over 2004 Second Quarter
-- Six Month Period Net Income Up 29% Over 2004 Six Month Period
-- Quarterly Cash Dividend Raised 14% Over Prior Quarter Payment
BENSALEM, Pa., July 19 /PRNewswire-FirstCall/ -- Healthcare Services
Group, Inc. (Nasdaq: HCSG) reported that revenues for the three months ended
June 30, 2005 increased 5% to $116,048,000 compared to $110,489,000 for the
same 2004 period. Net income increased 30% for the three months ended June
30, 2005 to $4,584,000 or $.17 per basic and $.16 per diluted common share,
compared to the 2004 second quarter net income of $3,530,000 or $.13 per basic
and per diluted common share. The earnings per common share data (as well as
the cash dividend data described below) has been adjusted to reflect the
three-for-two stock split paid in the form of a 50% stock dividend on May 2,
2005.
Revenues for the six months ended June 30, 2005 increased 6% to
$230,743,000 compared to $217,111,000 for the same 2004 period. Net income for
the six months ended June 30, 2005 increased by 29% to $8,847,000 or $.33 per
basic and $.31 per diluted common share compared to the 2004 six-month period
net income of $6,849,000 or $.26 per basic and $.25 per diluted common share.
Our Board of Directors has declared a quarterly cash dividend of $.08 per
common share, payable on August 12, 2005 to shareholders of record at the
close of business July 29, 2005. This represents a 14% increase over the
dividend declared for the 2005 first quarter and is the ninth consecutive
quarterly dividend payment, as well as the eighth consecutive increase since
our initiation of quarterly cash dividend payments in 2003.
Forward-Looking Statements/Risk Factors
This report includes forward-looking statements that are subject to risks
and uncertainties that could cause actual results or objectives to differ
materially from those projected. 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 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 19% of 2005 six-month period revenues (such client's Board of
Directors voted to conduct an auction to sell the company, which is
anticipated to be completed by year-end); 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,
including state and local regulations pertaining to the taxability of our
services; and risk factors described in our Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 2004 and
in Part I thereof under "Government Regulation of Clients," "Competition" and
"Service Agreements/Collections." Many of our 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 Medicare Prospective Payment System. 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 our 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
our 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, our operating results would also be
adversely affected if unexpected increases in the costs of labor and labor
related costs, materials, supplies and equipment used in performing our
services could not be passed on to 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.
HEALTHCARE SERVICES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31,
2005 2004
Cash and cash equivalents $82,533,000 $74,847,000
Accounts receivable, net 59,458,000 55,725,000
Deferred income taxes 709,000 574,000
Other current assets 15,532,000 14,125,000
Total current assets 158,232,000 145,271,000
Property and equipment, net 4,786,000 4,804,000
Notes receivable - long term, net 3,853,000 5,557,000
Deferred compensation funding 4,838,000 4,062,000
Deferred income taxes - long term 6,167,000 5,563,000
Other assets 1,708,000 1,707,000
$179,584,000 $166,964,000
Accrued insurance claims - current $4,670,000 $4,169,000
Other current liabilities 15,023,000 16,090,000
Total current liabilities 19,693,000 20,259,000
Accrued insurance claims - long term 10,896,000 10,227,000
Deferred compensation liability 6,023,000 5,018,000
Stockholders' equity 142,972,000 131,460,000
$179,584,000 $166,964,000
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
June 30,
2005 2004
Revenues $116,048,000 $110,489,000
Operating costs and expenses:
Cost of services provided 101,385,000 97,340,000
Selling, general and
administrative 8,109,000 7,761,000
Other income:
Investment and interest income 839,000 306,000
Income before income taxes 7,393,000 5,694,000
Income taxes 2,809,000 2,164,000
Net income $4,584,000 $3,530,000
Basic earnings per common share $.17 $.13
Diluted earnings per common share $.16 $.13
Cash dividends per common share $.07 $.04
Basic weighted average number of
common shares outstanding 26,878,000 26,255,000
Diluted weighted average number of
common shares outstanding 28,404,000 27,701,000
Common shares and per share data adjusted to reflect the three-for-two
stock split paid in the form of a 50% stock dividend on May 2, 2005
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Six Months Ended
June 30,
2005 2004
Revenues $230,743,000 $217,111,000
Operating costs and expenses:
Cost of services provided 201,155,000 190,789,000
Selling, general and
administrative 16,538,000 15,775,000
Other income:
Investment and interest income 1,219,000 500,000
Income before income taxes 14,269,000 11,047,000
Income taxes 5,422,000 4,198,000
Net income $8,847,000 $6,849,000
Basic earnings per common share $.33 $.26
Diluted earnings per common share $.31 $.25
Cash dividends per common share $.13 $.07
Basic weighted average number of
common shares outstanding 26,750,000 26,226,000
Diluted weighted average number of
common shares outstanding 28,221,000 27,679,000
Common shares and per share data adjusted to reflect the three-for-two
stock split paid in the form of a 50% stock dividend on May 2, 2005
SOURCE Healthcare Services Group, Inc.
 back to top
Related links:
http://www.hcsgcorp.com
CONTACT:
Daniel P. McCartney, Chairman and Chief
Executive Officer, or Thomas Cook, President and Chief Operating
Officer, both of Healthcare Services Group, +1-215-639-4274
|
