* Third quarter net income up 28% over 2004 third quarter
* Nine-month period net income up 29% over 2004 nine-month period
* Quarterly cash dividend raised 13% over prior quarter payment
BENSALEM, Pa., Oct. 18 /PRNewswire-FirstCall/ -- Healthcare Services
Group, Inc. (Nasdaq: HCSG) reported that revenues for the three months ended
September 30, 2005 increased 5% to $117,684,000 compared to $112,324,000 for
the same 2004 period. Net income increased 28% for the three months ended
September 30, 2005 to $4,774,000 or $.18 per basic and $.17 per diluted common
share, compared to the 2004 third quarter net income of $3,724,000 or $.14 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 nine months ended September 30, 2005 increased 6% to
$348,426,000 compared to $329,435,000 for the same 2004 period. Net income
for the nine months ended September 30, 2005 increased by 29% to $13,620,000
or $.51 per basic and $.48 per diluted common share compared to the 2004 nine-
month period net income of $10,572,000 or $.40 per basic and $.38 per diluted
common share.
Our Board of Directors has declared a quarterly cash dividend of $.09 per
common share, payable on November 14, 2005 to shareholders of record at the
close of business on October 31, 2005. This represents a 13% increase over
the dividend declared for the 2005 second quarter and is the tenth consecutive
quarterly dividend payment, as well as the ninth 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 nine-month period revenues (such
client's Board of Directors is pursuing a sale of the company which should 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 effect 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)
September 30, December 31,
2005 2004
Cash and cash equivalents $91,703,000 $74,847,000
Accounts receivable, net 59,315,000 55,725,000
Deferred income taxes 669,000 574,000
Other current assets 15,149,000 14,125,000
Total current assets 166,836,000 145,271,000
Property and equipment, net 4,818,000 4,804,000
Notes receivable - long term, net 4,084,000 5,557,000
Deferred compensation funding 5,125,000 4,062,000
Deferred income taxes - long term 6,084,000 5,563,000
Other assets 1,708,000 1,707,000
$188,655,000 $166,964,000
Accrued insurance claims - current $4,487,000 $4,169,000
Other current liabilities 24,049,000 16,090,000
Total current liabilities 28,536,000 20,259,000
Accrued insurance claims - long term 10,471,000 10,227,000
Deferred compensation liability 6,375,000 5,018,000
Stockholders' equity 143,273,000 131,460,000
$188,655,000 $166,964,000
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
September 30,
2005 2004
Revenues $117,684,000 $112,324,000
Operating costs and expenses:
Cost of services provided 102,884,000 98,644,000
Selling, general and administrative 8,024,000 7,967,000
Other income:
Investment and interest income 923,000 293,000
Income before income taxes 7,699,000 6,006,000
Income taxes 2,925,000 2,282,000
Net income $4,774,000 $3,724,000
Basic earnings per common share $.18 $.14
Diluted earnings per common share $.17 $.14
Cash dividends per common share $.08 $.05
Basic weighted average number of
common shares outstanding 27,079,000 26,090,000
Diluted weighted average number of
common shares outstanding 28,414,000 27,520,000
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 Nine Months Ended
September 30,
2005 2004
Revenues $348,426,000 $329,435,000
Operating costs and expenses:
Cost of services provided 304,039,000 289,433,000
Selling, general and administrative 24,562,000 23,742,000
Other income:
Investment and interest income 2,142,000 792,000
Income before income taxes 21,967,000 17,052,000
Income taxes 8,347,000 6,480,000
Net income $13,620,000 $10,572,000
Basic earnings per common share $.51 $.40
Diluted earnings per common share $.48 $.38
Cash dividends per common share $.21 $.12
Basic weighted average number of
common shares outstanding 26,861,000 26,180,000
Diluted weighted average number of
common shares outstanding 28,286,000 27,625,000
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, Inc., +1-215-639-4274
|
