Free 7-day Trial
All Articles and Columns »

Healthcare Services Group Inc. Reports Operating Results (10-K)

February 18, 2011 | About:
10qk

10qk

18 followers
Healthcare Services Group Inc. (HCSG) filed Annual Report for the period ended 2010-12-31.

Healthcare Services Group Inc. has a market cap of $1.15 billion; its shares were traded at around $17.38 with a P/E ratio of 32.9 and P/S ratio of 1.5. The dividend yield of Healthcare Services Group Inc. stocks is 3.7%. Healthcare Services Group Inc. had an annual average earning growth of 14.2% over the past 10 years.Hedge Fund Gurus that owns HCSG: Jim Simons of Renaissance Technologies LLC. Mutual Fund and Other Gurus that owns HCSG: Chuck Royce of Royce& Associates.

Highlight of Business Operations:

The aggregate market value of the voting stock (Common Stock, $.01 par value) held by non-affiliates of the Registrant as of the close of business on June 30, 2010 was approximately $814,000,000 based on closing sale price of the Common Stock on the NASDAQ National Global Select on that date. The Registrant does not have any non-voting common equity authorized or outstanding.

housekeeping clients. Linen services involve providing, laundering and processing of the sheets, pillow cases, blankets, towels, uniforms and assorted linen items used by our clients facilities. At some facilities that utilize our laundry and linen services, we install our own equipment. Such installation generally requires an initial capital outlay by us ranging from $5,000 to $100,000 depending on the size of the facility, installation and construction costs, and the cost of equipment required. We could incur relocation or other costs in the event of the cancellation of a linen service agreement where there was an investment by us in a corresponding laundry installation. The hiring, training and supervision of the hourly employees who perform laundry and linen services are similar to, and performed by the same management personnel who oversee the housekeeping services hourly employees located at the respective client facility. In some instances we own linen supplies utilized at our clients facilities and therefore, maintain a sufficient inventory of linen supplies to ensure their availability.

We have had varying collection experience with respect to our accounts and notes receivable. When contractual terms are not met, we generally encounter difficulty in collecting amounts due from certain of our clients. Therefore, we have sometimes been required to extend the period of payment for certain clients beyond contractual terms. These clients include those who have terminated service agreements and slow payers experiencing financial difficulties. In order to provide for these collection problems and the general risk associated with the granting of credit terms, we have recorded bad debt provisions (in an Allowance for Doubtful Accounts) of $2,200,000, $2,404,000 and $4,234,000 in the years ended December 31, 2010, 2009 and 2008, respectively (See Schedule II-Valuation and Qualifying Accounts, for year-end balances). These provisions represent .3%, .3% and .7%, as a percentage of total revenues, for the years ended December 31, 2010, 2009 and 2008, respectively. In making our credit evaluations, in addition to analyzing and anticipating, where possible, the specific cases described above, we consider the general collection risk associated with trends in the long-term care industry. We also establish credit limits, perform ongoing credit evaluation and monitor accounts to minimize the risk of loss. Notwithstanding our efforts to minimize credit risk exposure, our clients could be adversely affected if future industry trends change in such a manner as to negatively impact their cash flows, as discussed in Government Regulation of Clients and Risk Factors of this report. If our clients experience a negative impact in their cash flows, it would have a material adverse effect on our consolidated results of operations and financial condition.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 2.0/5 (4 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide