BENSALEM, PA — Healthcare Services Group, Inc. (NASDAQ: HCSG) has issued a statement in response to LaVie Care Centers’ recent Chapter 11 bankruptcy filing in the Northern District of Georgia. The company estimates a non-cash charge of approximately $0.20 per share for the second quarter due to LaVie’s restructuring.
Despite this development, Healthcare Services Group expects to continue providing services to LaVie without any impact on future revenue or earnings. The company anticipates no disruption in post-petition payments and maintains its Q2 and 2024 adjusted cash flow expectations of $5.0 million to $15.0 million and $40.0 million to $55.0 million, respectively.
Ted Wahl, CEO of Healthcare Services Group, addressed the situation, stating, “The recent restructuring activity we’ve seen, including LaVie’s, results from conditions and events over the past few years rather than the current state of the sector. While this restructuring will affect the second quarter’s reported results, it will strengthen our customer base’s financial health in the long term.”
Wahl added that industry fundamentals continue to trend positively. Workforce availability is improving, occupancy rates are at 79%, just under pre-pandemic levels, and the Centers for Medicare & Medicaid Services (CMS) has proposed a 4.1% increase in Medicare rates for fiscal year 2025.
Looking ahead, Healthcare Services Group remains focused on executing its strategic priorities. These include driving growth, managing costs, and ensuring consistent billing collections. The company remains confident in its ability to deliver long-term value to shareholders.
Healthcare Services Group will host a conference call on July 24, 2024, to discuss its results for the three months ended June 30, 2024.
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