Business
Healthcare Services Group, Inc. Reports Q2 2023 Results
Robust New Business Pipeline Sets Stage For Second Half Of Year Growth BENSALEM, Pa.--(BUSINESS WIRE)-- Healthcare Services Group, Inc. (NASDAQ:HCSG)
About this update from Healthcare Services Group, Inc.
[{"type":"text","content":"\nRobust New Business Pipeline Sets Stage For Second Half Of Year Growth\n\n\n BENSALEM, Pa.--(BUSINESS WIRE)--\nHealthcare Services Group, Inc. (NASDAQ:HCSG) reported for the three months ended June 30, 2023 revenue of $418.9 million, GAAP net income of $8.6 million, or $0.12 per basic and diluted common share, and adjusted EBITDA of $26.3 million.\n\n\nQ2 Results\n\n\n\nRevenue for the quarter was reported at $418.9 million, with housekeeping & laundry and dining & nutrition segment revenues of $190.8 million and $228.1 million, respectively.\n\n\n\nHousekeeping & laundry and dining & nutrition segment margins were 8.7% and 5.5%, respectively.\n\n\n\nDirect cost of services was reported at $367.7 million, or 87.8%. Direct cost included an $11.3 million increase in CECL AR reserves.\n\n\n\nSG&A was reported at $41.4 million; after adjusting for the $2.3 million increase in deferred compensation, actual SG&A was $39.1 million, or 9.3%.\n\n\n\nThe effective tax rate was 24.6%. The Company expects a 2023 tax rate of 24% to 26%.\n\n\n\nCash flow from operations for the quarter was $7.4 million and was impacted by an $18.8 million increase in accrued payroll and a $39.0 million increase in accounts receivable related to the timing of cash collections. DSO for the quarter was 83 days.\n\n\n\nTed Wahl, Chief Executive Officer, stated, “In Q2, we delivered strong core earnings and added to an already robust new business pipeline, while navigating a difficult cash collections environment. Industry fundamentals continue to improve, and a stabilizing labor market and select state-based reimbursement increases have contributed to the gradual but steady occupancy recovery. While there remains uncertainty as to what a minimum staffing requirement might look like for the industry, we remain hopeful that CMS will fully consider the impact on operators before finalizing a rule, and have confidence in our customers’ ability to manage any such rule.”\n\n\nMr. Wahl concluded, “We enter the second half of the year with three clear priorities. The first is continuing to manage direct costs at 86%, excluding CECL. The second is collecting what we bill, building on the strong momentum gained in May and June. The third and perhaps the most impactful is the realization of our business development efforts yielding new facility starts. There is a high lev...