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HEALTHCARE SERVICES GROUP REPORTS RESULTS FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPT. 30

 HUNTINGDON VALLEY, Pa., Oct. 18 /PRNewswire/ -- Healthcare Services Group, Inc. (NASDAQ-NMS: HCSG) today reported revenues for the three months ended Sept. 30, 1993, of $28,874,000 compared to $25,953,000 for the same 1992 quarter, representing over an 11 percent increase.
 Earnings from operations increased more than 14 percent for the quarter to $2,474,000 compared to $2,161,000 for the third quarter of 1992 while net income for the three months ended Sept. 30, 1993, was $1,477,000 or $.19 per common share, compared to the 1992 third quarter results of $1,375,000 or $.18 per common share.
 Revenues for the nine months ended Sept. 30, 1993, were $83,119,000 compared to $72,625,000 for the same period of 1992, representing more than a 14 percent increase. Earnings from operations for the nine months ended Sept. 30, 1993, increased 15 percent to $6,557,000 as compared to $5,713,000 for the same 1992 period while net income for the nine months period of 1993 was $4,181,000 or $.53 per common share, of which approximately $174,000 or $.02 per common share represents the recovery of contingent losses on promissory notes sold, compared to the nine month period ending Sept. 30, 1992, net income results of $4,199,000 or $.54 per common share which includes net income of approximately $550,000 or $.07 per common share from the recovery of contingent losses on promissory notes sold.
 Additionally, the net income and per common share amounts for the 1993 nine month period include an increase of approximately $104,000 or $.01 per common share representing the cumulative effect of the company's change in accounting for deferred taxes pursuant to Financial Accounting Standards No. 109, which was adopted in the first quarter of 1993.
 Management attributed the strong results to continued expansion in the number of long-term care facilities across the country utilizing the company's services.
 "We are pleased with our performance, which reflects the growing awareness in the healthcare field of the benefits of outsourcing services," said Daniel P. McCartney, chief executive officer of Healthcare Services. "The emphasis on cost containment in all areas of healthcare is forcing long-term care facilities to seek ways to reduce the cost of housekeeping, laundry and linen services. Healthcare Services takes a professional approach to providing these services, which results in a more cost effective, higher quality product."
 McCartney continued, "Healthcare Services Group combines over 16 years experience in this field with a strong national management organization to address the cost containment environment present in the healthcare industry. Accordingly, we believe Healthcare Services Group is well-positioned for continued growth as the number of long-term care facilities increases to meet the needs of an aging population."
 Healthcare Services Group, Inc. is the largest national provider of professional housekeeping and laundry services to long-term care facilities.
 HEALTHCARE SERVICES GROUP, INC.
 Statements of Income
 (Unaudited)
 Three months ended Sept. 30 1993 1992
 Revenues $28,874,000 $25,953,000
 Operating costs and expenses:
 Cost of services provided 24,103,000 22,064,000
 Selling, general and administrative 2,297,000 1,728,000
 Recovery of contingent losses on
 promissory notes sold 100,000 ---
 Other income:
 Other income --- (7,000)
 Interest income (expense) (49,000) 138,000
 Income before income taxes 2,525,000 2,292,000
 Income taxes 1,048,000 917,000
 Net income 1,477,000 1,375,000
 Earnings per common share $.19 $.18
 Weighted average number of
 common shares outstanding 7,848,547 7,809,284
 Nine months ended Sept. 30 1993 1992
 Revenues $83,119,000 $72,625,000
 Operating costs and expenses:
 Cost of services provided 70,016,000 61,793,000
 Selling, general and administrative 6,546,000 5,119,000
 Recovery of contingent losses on
 promissory notes sold 300,000 910,000
 Other income:
 Other income --- 9,000
 Interest income 151,000 367,000
 Income before income taxes and
 cumulative effect of change in
 accounting for income taxes 7,008,000 6,999,000
 Income taxes 2,931,000 2,800,000
 Net income before cumulative effect
 of change in accounting for
 income taxes 4,077,000 4,199,000
 Cumulative effect of change in
 accounting for income taxes 104,000 ---
 Net income 4,181,000 4,199,000
 Earnings per common share before
 cumulative effect of change in
 accounting for income taxes $.52 $.54
 Cumulative effect of change in
 accounting for income taxes .01 ---
 Earnings per common share .53 .54
 Weighted average number of
 common shares outstanding 7,841,243 7,834,576
 Condensed Balance Sheets
 (Unaudited)
 Sept. 30, 1993 Dec. 31, 1992
 Current assets $46,213,000 $43,056,000
 Property and equipment 7,533,000 7,584,000
 Intangible assets 1,177,000 1,219,000
 Cost in excess of fair value
 of net assets acquired 2,507,000 2,590,000
 Certificates of deposit pledged
 for loan guarantees 1,500,000 1,500,000
 Other assets 6,528,000 5,140,000
 Total 65,458,000 61,089,000
 Accrued insurance claims $4,683,000 $4,844,000
 Other current liabilities 5,274,000 4,977,000
 Reserve for contingent losses
 on promissory notes 700,000 1,000,000
 Stockholders' equity 54,801,000 50,268,000
 Total 65,458,000 61,089,000
 /delval/
 -0- 10/18/93
 /CONTACT: Daniel P. McCartney, chairman and chief executive officer, or Thomas A. Cook, president and chief operating officer, of Healthcare Services Group, 215-938-1661/
 (HCSG)


CO: Healthcare Services Group, Inc. ST: Pennsylvania IN: HEA SU: ERN

MJ-LJ -- PH043 -- 3623 10/18/93 17:38 EDT
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Date:Oct 18, 1993
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