Form 8-K HEALTHCARE SERVICES GROU For: Oct 11
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 11, 2016
HEALTHCARE SERVICES GROUP, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 0-12015
Pennsylvania | 23-2018365 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification number) |
3220 Tillman Drive, Suite 300, Bensalem, Pennsylvania | 19020 |
(Address of principal executive office) | (Zip code) |
Registrant's telephone number, including area code: 215-639-4274
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
( ) Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
( ) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
( ) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
( ) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 | Results of Operations and Financial Condition. |
On October 11, 2016, Healthcare Services Group, Inc. (the "Company") issued a press release (the "Press Release") announcing its earnings for the three and nine months ended September 30, 2016. A copy of the Press Release is being furnished hereto as Exhibit 99.1 and is hereby incorporated by reference to this Current Report.
The information furnished herein, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act.
Item 8.01 | Other Events. |
The Press Release also announced the Company's third quarter 2016 quarterly cash dividend of $0.1850 per common share, payable on December 23, 2016 to shareholders of record at the close of business on November 18, 2016.
Item 9.01 | Financial Statements and Exhibits. |
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits. The following exhibit is being furnished herewith:
99.1 Press Release and financial tables dated October 11, 2016 issued by Healthcare Services Group, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HEALTHCARE SERVICES GROUP, INC.
Date: October 11, 2016 By: /s/ John C. Shea
Name: John C. Shea
Title: Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release and financial tables dated October 11, 2016 issued by Healthcare Services Group, Inc.
Exhibit 99.1
HEALTHCARE SERVICES GROUP, INC. REPORTS RESULTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 &
INCREASES THIRD QUARTER 2016 CASH DIVIDEND
Bensalem, PA — October 11, 2016 — Healthcare Services Group, Inc. (NASDAQ: HCSG) reported that revenues for the three months ended September 30, 2016 increased approximately 9% to $392,734,000 compared to the same 2015 period. Net income for the three months ended September 30, 2016 was $19,711,000 or $0.27 per basic and per diluted common share, compared to the three months ended September 30, 2015 net income of $17,086,000 or $0.24 per basic and per diluted common share.
Revenues for the nine months ended September 30, 2016 increased approximately 9% to $1,164,097,000 compared to $1,070,767,000 for the same 2015 period. Net income for the nine months ended September 30, 2016 was $57,097,000 or $0.79 per basic and $0.78 per diluted common share, compared to the nine months ended September 30, 2015 net income of $48,890,000 or $0.68 per basic and diluted common share.
Additionally, our Board of Directors declared a quarterly cash dividend of $0.1850 per common share, payable on December 23, 2016, to shareholders of record at the close of business on November 18, 2016. This represents the 54th consecutive quarterly cash dividend payment, as well as the 53rd consecutive increase since our initiation of quarterly cash dividend payments in 2003.
The Company will host a conference call on Wednesday, October 12, 2016 at 8:30 a.m. Eastern Time to discuss its results for the three and nine months ended September 30, 2016. The call may be accessed via phone at 404-665-9534. The call will be simultaneously webcast under the "Events & Presentations" section of the investor relations page on our website, www.hcsg.com. A replay of the webcast will also be available on our website through approximately 10:00 p.m. Eastern Time on Wednesday, October 12, 2016.
The Company also announced that it will present at the Stifel Healthcare Conference, which is scheduled to occur on November 15-16, 2016 at the New York Palace Hotel in New York City, as well as at the Jefferies London Healthcare Conference, scheduled for November 16-17, 2016 at the Waldorf Hilton Hotel in London, England.
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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, 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; having several significant clients who each individually contributed at least 3% with one as high as 9% of our total consolidated revenues for the three and nine months ended September 30, 2016; 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 other labor related matters such as minimum wage increases; continued receipt of tax benefits arising from our corporate reorganization and self-funded health insurance program transition; risks associated with the reorganization of our corporate structure; and the risk factors described in our Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2015 in Part I thereof under ''Government Regulation of Clients,” ''Competition'' and ''Service Agreements/Collections," and under Item IA "Risk Factors."
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 the successful execution of our 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.
Company Contacts: | ||||
Daniel P. McCartney | Theodore Wahl | Matthew J. McKee | ||
Chairman | President and Chief Executive Officer | Vice President of Strategy | ||
215-639-4274 | ||||
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HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenues | $ | 392,734,000 | $ | 360,165,000 | $ | 1,164,097,000 | $ | 1,070,767,000 | |||||||
Operating costs and expenses: | |||||||||||||||
Cost of services provided | 336,340,000 | 308,645,000 | 998,595,000 | 916,798,000 | |||||||||||
Selling, general and administrative | 27,182,000 | 23,445,000 | 78,192,000 | 75,332,000 | |||||||||||
Income from operations | 29,212,000 | 28,075,000 | 87,310,000 | 78,637,000 | |||||||||||
Other income (expense), net: | |||||||||||||||
Investment and interest | 1,359,000 | (1,334,000 | ) | 2,548,000 | (585,000 | ) | |||||||||
Income before income taxes | 30,571,000 | 26,741,000 | 89,858,000 | 78,052,000 | |||||||||||
Income tax provision | 10,860,000 | 9,655,000 | 32,761,000 | 29,162,000 | |||||||||||
Net income | $ | 19,711,000 | $ | 17,086,000 | $ | 57,097,000 | $ | 48,890,000 | |||||||
Basic earnings per common share | $ | 0.27 | $ | 0.24 | $ | 0.79 | $ | 0.68 | |||||||
Diluted earnings per common share | $ | 0.27 | $ | 0.24 | $ | 0.78 | $ | 0.68 | |||||||
Cash dividends per common share | $ | 0.19 | $ | 0.18 | $ | 0.55 | $ | 0.53 | |||||||
Basic weighted average number of common shares outstanding | 72,839,000 | 72,009,000 | 72,718,000 | 71,714,000 | |||||||||||
Diluted weighted average number of common shares outstanding | 73,592,000 | 72,691,000 | 73,435,000 | 72,381,000 | |||||||||||
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HEALTHCARE SERVICES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, 2016 | December 31, 2015 | ||||||
Cash and cash equivalents | $ | 24,327,000 | $ | 33,189,000 | |||
Marketable securities, at fair value | 80,623,000 | 69,496,000 | |||||
Accounts and notes receivable, net | 265,533,000 | 214,854,000 | |||||
Other current assets | 53,985,000 | 47,803,000 | |||||
Total current assets | 424,468,000 | 365,342,000 | |||||
Property and equipment, net | 13,275,000 | 13,086,000 | |||||
Notes receivable - long term | 4,048,000 | 2,972,000 | |||||
Goodwill | 44,438,000 | 44,438,000 | |||||
Other intangible assets, net | 15,016,000 | 17,108,000 | |||||
Deferred compensation funding | 26,332,000 | 25,391,000 | |||||
Other assets | 9,246,000 | 12,612,000 | |||||
Total Assets | $ | 536,823,000 | $ | 480,949,000 | |||
Accrued insurance claims - current | $ | 23,907,000 | $ | 19,740,000 | |||
Other current liabilities | 91,762,000 | 76,325,000 | |||||
Total current liabilities | 115,669,000 | 96,065,000 | |||||
Accrued insurance claims - long term | 63,213,000 | 62,510,000 | |||||
Deferred compensation liability | 26,837,000 | 25,918,000 | |||||
Stockholders' equity | 331,104,000 | 296,456,000 | |||||
Total Liabilities and Stockholders' Equity | $ | 536,823,000 | $ | 480,949,000 | |||
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