Healthcare Services Group, Inc. reported a consolidated revenue of $447.7 million for the three months ended March 31, 2025, marking a 5.7% increase from $423.4 million in the same period of the previous year. The company's net income also rose to $17.2 million, or $0.23 per diluted share, compared to $15.3 million, or $0.21 per diluted share, in the prior year, reflecting a 12.5% increase in profitability. The growth in revenue was primarily driven by a 3.0% increase in Housekeeping revenues, which totaled $196.3 million, and a 7.9% increase in Dietary revenues, which reached $251.3 million.
In terms of operational metrics, the company served approximately 2,800 facilities across the United States as of March 31, 2025. The Housekeeping segment accounted for approximately 43.9% of total revenues, while the Dietary segment represented about 56.1%. The increase in revenues was attributed to contractual price increases in Housekeeping and new business additions in Dietary, along with increases in contractual pass-through costs to customers.
Healthcare Services Group's total operating costs and expenses increased by 5.8% to $379.7 million, with costs of services provided remaining stable at 84.8% of revenues. The company reported a decrease in selling, general, and administrative expenses to $44.97 million, down from $46.91 million in the previous year, largely due to lower costs associated with the deferred compensation plan investments. However, corporate expenses rose by 18.8% to $18.74 million, driven by increased payroll and related costs amid ongoing inflation.
The company continues to maintain a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $114.8 million as of March 31, 2025. The company has a $300 million line of credit, which remains untapped, and is in compliance with its financial covenants. Looking ahead, Healthcare Services Group aims to sustain its growth trajectory by securing new service agreements and managing costs effectively, although it acknowledges potential challenges from market conditions and regulatory changes affecting its customer base in the healthcare sector.
About HEALTHCARE SERVICES GROUP INC
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