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Healthcare Services Group, Inc. (HCSG) provides management, administrative, and operational services to healthcare facilities across the United States. The company specializes in housekeeping, laundry, linen, facility maintenance, and dietary services, catering to nursing homes, retirement complexes, rehabilitation centers, and hospitals. HCSG operates under full-service and management-only agreements, ensuring tailored solutions for its clients' operational needs.
- Dietary Services - Manages food purchasing, meal preparation, and professional dietitian services, including menu development to meet residents' dietary needs. Offers clinical consulting services as standalone or bundled options.
- Housekeeping Services - Oversees cleaning, disinfecting, and sanitizing resident rooms and common areas, along with laundering and processing linens, uniforms, and personal clothing. Provides on-site management and continuous training for employees.
| Name | Position | External Roles | Short Bio | |
|---|---|---|---|---|
Theodore Wahl ExecutiveBoard | President and Chief Executive Officer | Theodore Wahl has served as the President and Chief Executive Officer of HCSG since May 2015 and has been on the board as a Director since 2011. He joined HCSG in 2004 and previously held multiple operational roles at the company as well as serving as a Senior Manager at EY’s Transaction Advisory Group. | View Report → | |
Andrew M. Brophy Executive | Senior Vice President, Controller & Chief Accounting Officer | Andrew M. Brophy has served as Senior Vice President, Controller & Chief Accounting Officer at HCSG since August 2024. Previously, he held roles as Vice President, Principal Accounting Officer & Controller from November 2021 to July 2024 along with other key positions at HCSG. | ||
Andrew W. Kush Executive | Executive Vice President & Chief Operating Officer | Andrew W. Kush is the Executive Vice President & Chief Operating Officer at HCSG since February 2020. Previously, he served as Executive Vice President & Chief Administrative Officer from June 2017 to February 2020 and held additional leadership roles at HCSG. | ||
Jason J. Bundick Executive | Executive Vice President, Chief Compliance Officer, General Counsel, and Secretary | Jason J. Bundick has served as the Executive Vice President, Chief Compliance Officer, General Counsel, and Secretary at HCSG since December 2013 and joined as Corporate Counsel in 2012. He previously practiced law at Drinker Biddle & Reath LLP for over five years. | ||
John C. Shea Executive | Executive Vice President & Chief Administrative Officer | John C. Shea is the Executive Vice President & Chief Administrative Officer at HCSG since September 2021. Previously, he held roles including Chief Financial Officer, Secretary, Vice President of Finance, and Chief Accounting Officer after joining HCSG in 2009. | ||
Patrick J. Orr Executive | Executive Vice President & Chief Revenue Officer | Patrick J. Orr has been serving as Executive Vice President & Chief Revenue Officer at HCSG since January 2021, after initially joining the company in 2014 as Senior Vice President of Financial Services. Prior to HCSG, he was a partner at Klestadt & Winters, LLP. | ||
Vikas Singh Executive | Executive Vice President & Chief Financial Officer | Vikas Singh has served as the Executive Vice President and Chief Financial Officer at HCSG since September 3, 2024, and brings over two decades of experience from roles at Bank of America Securities, Credit Suisse, Citibank, and GSK. | ||
Daniela Castagnino Board | Director | Information Specialist at the United Spinal Association | Daniela Castagnino has served as Director at HCSG since 2018 and is a member of the Environmental, Social & Governance Committee. She is also the Information Specialist at the United Spinal Association and has prior international consulting experience. | |
Diane S. Casey Board | Director | Diane S. Casey has served as the Director at HCSG since 2011 and is the Chairwoman of the Nominating, Compensation and Stock Option Committee, a role that reflects her strong background in clinical nursing and healthcare management. | ||
Dino D. Ottaviano Board | Director | Dino D. Ottaviano has been a Director at HCSG since 2007 and serves on its Audit Committee. Prior to HCSG, he retired as Vice President of Business Development at Transcontinental Direct in 2022, bringing extensive operational, executive, and financial expertise. | ||
John J. McFadden Board | Director | Principal of Global Circulation Services | John J. McFadden serves as a Director at HCSG since 2012 and is a member of the NCSO Committee. He has extensive experience in marketing and advertising, having served as Principal of Global Circulation Services since 2008 and held various management positions at The McGraw-Hill Companies. | |
Jude Visconto Board | Chairman of the Board of Directors | Principal of American Property Holdings | Jude Visconto has served as an independent director at HCSG since 2015 and was appointed Chairman of the Board in 2017, bringing a strong financial and management background to the company. He also has extensive experience in real estate investment, which further enhances his insights and leadership in corporate governance. | |
Kurt Simmons Board | Director | Audit Partner at WithumSmith+Brown, PC | Kurt Simmons, Jr. has been serving as a Director at Healthcare Services Group, Inc. (HCSG) since 2021. He was appointed Chairman of the Audit Committee in 2022 and brings extensive experience as a CPA with roles including Audit Partner at WithumSmith+Brown, PC since 2021. | |
Laura Grant Board | Director | Managing Partner and President of Chatham Financial; Board Member of Chatham Financial | Laura Grant has served as a Director at HCSG since 2020 and is a member of the Audit Committee. Externally, she is the Managing Partner and President as well as a board member at Chatham Financial. | |
Thomas G. Whalen Board | Member of the Board of Directors | Senior Managing Director and Co-head of the Financial Restructuring Group at Griffin Financial (since 2012) ; Bankruptcy Lawyer at Stevens & Lee (since 2000) | Thomas G. Whalen is an independent director at HCSG. He has extensive experience in financial restructuring, serving as Senior Managing Director and Co-head of the Financial Restructuring Group at Griffin Financial since 2012 , and has practiced as a bankruptcy lawyer at Stevens & Lee since 2000. |
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Regarding new business start-up costs, you mentioned incurring $3–$4 million in Q4; can you clarify how these costs will affect quarterly margins and what timing assumptions you are using for new business onboarding?
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With mid-single-digit top-line growth as your baseline, how are you balancing the revenue contributions between core healthcare services and the cross-sell opportunity in dining within your Environmental Services customer base, and what specific targets do you have for each segment?
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Your cash flow discussion noted significant adjustments due to payroll accrual changes; can you explain how you expect these timing variations to stabilize going forward and what measures are in place to mitigate any negative quarterly impacts?
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Although you reported improvements in DSOs and collections, what are the underlying factors for the 1.2% bad debt expense in Q4, and how might shifts in the receivables mix impact your credit quality in future quarters?
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Given the recent increases in food and labor inflation, with food inflation at its highest level since Q4 2022, how are you modifying contract structures to effectively pass through these costs and protect your margins in 2025?
| Customer | Relationship | Segment | Details |
|---|---|---|---|
Genesis Healthcare, Inc. | Housekeeping and dietary services (full-service agreements) | All | Revenue: 8.7% ($148.9M) in 2024 , 10.9% ($181.4M) in 2023 , 10.0% ($169.1M) in 2022. Accounts receivable: $46.1M in 2024. Notes receivable: $21.9M in 2024. |
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Regional Dining Operator | 2022 | The acquisition was finalized in 2022 (transaction occurred in Q4 2021) with an $18.0 million cash consideration, acquiring primarily intangible assets and goodwill; a $0.7 million goodwill adjustment was made at measurement period end on March 31, 2022, and the goodwill is not tax-deductible. |
Recent press releases and 8-K filings for HCSG.
- Revenue reached $447.7 million, up 5.7% YoY with net income of $17.2 million and diluted EPS of $0.23.
- Adjusted cash flow from operations totaled $32.1 million – best in five years – with DSO shortened from 88 to 78 days.
- Strong liquidity position reported with $143.9 million in cash and marketable securities and an undrawn $500 million credit facility.
- Solid segment performance with Environmental Services at $196.3 million (10.8% margin) and Dietary Services at $251.3 million (7.6% margin).
- Strategic initiatives include Q2 revenue guidance of $445–$455 million, a tuck-in acquisition contributing ~1% to revenue, and ongoing opportunistic share buybacks ($7 million repurchased in Q1).
- Raised cash flow forecast for 2025 to $60.0–$75.0 million and reiterated mid-single-digit revenue growth guidance.
- Q4 2024 results: Reported revenue of $437.8 million, net income of $11.9 million, and diluted EPS of $0.16.
- Cash flow performance: Generated $36.2 million from operations (or $27.0 million excluding payroll accrual) in Q4.
- 2025 outlook: Projects Q1 revenue between $440.0–$450.0 million with targeted actual cash flows of $45.0 to $60.0 million.
- Strategic priorities: Focus on managing cost efficiency (targeting 86% cost of services and SG&A within 8.5–9.5%), driving organic growth through new business additions, and expanding service offerings.
- Liquidity & retention: Maintains strong liquidity with $135.8 million in cash/marketable securities and a $500 million credit facility, while client retention exceeded 90%.