Healthcare Services Group, Inc. Reports Results for the Three Months and Year
Ended December 31, 2011
BENSALEM, PA, Feb 07, 2012 (MARKETWIRE via COMTEX) -- Healthcare Services Group,
Inc. (HCSG) reported that revenues for the three months ended December 31, 2011
increased approximately 24% to $250,239,000 compared to $202,087,000 for the same
2010 period. Net income for the three months ended December 31, 2011 increased
approximately 16% to $10,565,000 or $.16 per basic and per diluted common share,
compared to the 2010 fourth quarter net income of $9,123,000 or $.14 per basic
and per diluted common share.
The Company also reported that revenues for the year ended December 31, 2011
increased approximately 15% to $889,065,000 compared to $773,956,000 for the same
2010 period. Net income for the year ended December 31, 2011 increased
approximately 11% to $38,156,000 or $.57 per basic and $.56 per diluted common
share compared to the year ended December 31, 2010 net income of $34,441,000 or
$.52 per basic and $.51 per diluted common share.
Additionally, our Board of Directors had previously declared on January 24, 2012
a regular quarterly cash dividend of $.16125 per common share, payable on March
16, 2012 to shareholders of record at the close of business on February 24, 2012.
This represents our 35th consecutive regular quarterly cash dividend payment, as
well as the 34th consecutive increase since our initiation of regular quarterly
cash dividend payments in 2003.
The Company also announced that it will make a presentation on February 8, 2012
regarding the Company at the "UBS Annual Global Healthcare Services Conference"
at the Grand Hyatt in New York City. This presentation will also be audio webcast
at ibb.ubs.com.
The Company will host a conference call today at 4:30 PM Eastern Time to discuss
its results for the three and twelve month periods ended December 31, 2011. The
call in number will be 888-337-8169. Passcode #3743187
Cautionary Statement Regarding Forward-Looking Statements This release and any
schedules incorporated by reference into it may 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, which are not historical facts but rather are 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 9% of
revenues in the year ended December 31, 2011; 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, 2010
in Part I thereof under "Government Regulation of Clients", "Competition" and
"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 and related agencies have affected through the
enactment of a number of major laws and regulations during the past decade,
including the March 2010 enactment of the Patient Protection and Affordable Care
Act and the Health Care and Education Reconciliation Act of 2010. Most recently,
on July 29, 2011, the United States Center for Medicare Services issued final
rulings which, among other things, will reduce Medicare payments to nursing
centers by 11.1% and change the reimbursement for the provision of group
rehabilitation therapy services to Medicare beneficiaries. Currently, the U.S.
Congress is considering further changes or revising legislation relating to
health care in the United States which, among other initiatives, may impose cost
containment measures impacting our clients. These laws and proposed laws and
forthcoming regulations have significantly altered, or threaten to alter, overall
government reimbursement funding rates and mechanisms. The overall effect of
these laws and trends in the long-term care industry has 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 dietary services to long-term care and related health
care facilities.
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended
December 31,
20112010
--------------------------------
Revenues$250,239,000$202,087,000
Operating costs and expenses:
Cost of services provided217,190,000172,952,000
Selling, general and administrative18,671,00015,771,000
--------------------------------
Income from operations14,378,00013,364,000
Other income:
Investment and interest income1,189,0001,073,000
--------------------------------
Income before income taxes15,567,00014,437,000
Income taxes5,002,0005,314,000
--------------------------------
Net income$10,565,000$9,123,000
================================
Basic earnings per common share$.16$.14
================================
Diluted earnings per common share$.16$.14
================================
Cash dividends per common share$.16$.155
================================
Basic weighted average number of common
shares outstanding66,812,00066,074,000
================================
Diluted weighted average number of common
shares outstanding67,705,00067,232,000
================================
HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Year Ended
December 31,
20112010
--------------------------------
Revenues$889,065,000$773,956,000
Operating costs and expenses:
Cost of services provided766,958,000665,149,000
Selling, general and administrative65,306,00057,310,000
--------------------------------
56,801,00051,497,000
Other income:
Investment and interest income1,011,0002,622,000
--------------------------------
Income before income taxes57,812,00054,119,000
Income taxes19,656,00019,678,000
--------------------------------
Net income$38,156,000$34,441,000
================================
Basic earnings per Common Share$.57$.52
================================
Diluted earnings per Common Share$.56$.51
================================
Cash dividends per common share$.63$.60
================================
Basic weighted average number of common
shares outstanding66,637,00065,917,000
================================
Diluted weighted average number of common
shares outstanding67,585,00067,008,000
================================
HEALTHCARE SERVICES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
December 31,December 31,
20112010
--------------------------------
Cash and cash equivalents$38,639,000$39,692,000
Marketable securities, net31,337,00043,437,000
Accounts receivable, net130,744,000108,426,000
Other current assets31,401,00030,220,000
--------------------------------
Total current assets232,121,000221,775,000
Property and equipment, net9,763,0006,656,000
Notes receivable- long term, net1,483,0005,055,000
Goodwill, net16,955,00016,955,000
Other Intangible Assets, net7,372,0007,262,000
Deferred compensation funding13,780,00012,080,000
Other assets8,221,0008,151,000
--------------------------------
Total Assets$289,695,000$277,934,000
================================
Accrued insurance claims- current$5,296,000$5,076,000
Other current liabilities40,091,00035,455,000
--------------------------------
Total current liabilities45,387,00040,531,000
Accrued insurance claims- long term12,358,00011,845,000
Deferred compensation liability14,224,00012,479,000
Stockholders' equity217,726,000213,079,000
--------------------------------
Total Liabilities and Stockholders'
Equity$289,695,000$277,934,000
================================
Company Contact:
Daniel P. McCartney
Chairman and Chief Executive Officer
215-639-4274 |
