# HEALTHCARE SERVICES GROUP INC (HCSG)

Informational only - not investment advice.

CIK: 0000731012
SIC: 8050 Services-Nursing & Personal Care Facilities
SIC breadcrumb: [Services](/division/I/) > [SIC Major Group 80](/major-group/80/) > [SIC 8050 Services-Nursing & Personal Care Facilities](/industry/8050/)
Latest 10-K filed: 2026-02-13
SEC page: https://www.sec.gov/edgar/browse/?CIK=731012
Filing source: https://www.sec.gov/Archives/edgar/data/731012/000073101226000009/hcsg-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-13 · accession 0000731012-26-000009 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000731012.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 1,837,173,000 USD | 2025 | verified |
| Net income | 59,059,000 USD | 2025 | verified |
| Assets | 794,253,000 USD | 2025 | verified |
| Free cash flow | 139,150,000 USD | 2025 | computed |
| Net margin | 3.21% | 2025 | computed |
| Revenue YoY | +7.08% | 2025 | computed |
| ROE | 11.58% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | HCSG | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 3.2% | 3.2% | 51 | 56 |
| Revenue growth | 7.1% | 11.8% | 38 | 57 |
| FCF margin | 7.6% | 5.4% | 62 | 48 |
| ROE | 11.6% | 7.9% | 69 | 53 |
| ROA | 7.4% | 2.8% | 79 | 58 |
| Liabilities / equity | 0.56 | 1.13 | 30 | 54 |
| Current ratio | 3.38 | 1.63 | 77 | 58 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 80 SIC Major Group 80, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 1837173000 | USD | 2025 | 2026-02-13 |
| Net income | 59059000 | USD | 2025 | 2026-02-13 |
| Assets | 794253000 | USD | 2025 | 2026-02-13 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000731012.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2008 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue |  |  |  |  | 1,861,206,000 | 2,002,601,000 | 1,840,778,000 | 1,760,303,000 | 1,641,959,000 | 1,690,176,000 | 1,671,389,000 | 1,715,682,000 | 1,837,173,000 |
| Net income |  |  |  | 77,396,000 | 88,226,000 | 83,524,000 | 64,581,000 | 98,682,000 | 48,543,000 | 34,243,000 | 38,386,000 | 39,471,000 | 59,059,000 |
| Diluted EPS |  |  |  | 1.05 | 1.19 | 1.12 | 0.87 | 1.32 | 0.65 | 0.46 | 0.52 | 0.53 | 0.81 |
| Operating cash flow |  |  |  | 41,400,000 | 7,630,000 | 80,031,000 | 93,581,000 | 217,213,000 | 37,108,000 | -8,167,000 | 43,498,000 | 30,802,000 | 144,968,000 |
| Capital expenditures |  |  |  | 5,442,000 | 5,397,000 | 4,940,000 | 4,368,000 | 4,341,000 | 5,687,000 | 5,210,000 | 5,406,000 | 6,336,000 | 5,818,000 |
| Dividends paid |  |  | 51,375,000 | 53,342,000 | 55,244,000 | 57,201,000 | 58,951,000 | 60,705,000 | 62,226,000 | 63,373,000 | 0.00 | 0.00 |  |
| Share buybacks | 4,652,000 |  |  |  |  |  | 0.00 | 0.00 | 21,535,000 | 0.00 | 11,283,000 | 5,018,000 | 61,586,000 |
| Assets |  |  |  | 528,446,000 | 676,003,000 | 692,603,000 | 722,592,000 | 785,031,000 | 779,889,000 | 720,836,000 | 790,652,000 | 802,772,000 | 794,253,000 |
| Stockholders' equity |  |  |  | 338,842,000 | 399,952,000 | 440,780,000 | 460,305,000 | 470,276,000 | 445,171,000 | 418,279,000 | 456,616,000 | 499,927,000 | 510,210,000 |
| Cash and cash equivalents |  | 75,280,000 | 33,189,000 | 23,853,000 | 9,557,000 | 26,025,000 | 27,329,000 |  |  | 26,279,000 | 54,330,000 | 56,776,000 | 125,189,000 |
| Free cash flow |  |  |  | 35,958,000 | 2,233,000 | 75,091,000 | 89,213,000 | 212,872,000 | 31,421,000 | -13,377,000 | 38,092,000 | 24,466,000 | 139,150,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2008 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin |  |  |  |  | 4.74% | 4.17% | 3.51% | 5.61% | 2.96% | 2.03% | 2.30% | 2.30% | 3.21% |
| Return on equity |  |  |  | 22.84% | 22.06% | 18.95% | 14.03% | 20.98% | 10.90% | 8.19% | 8.41% | 7.90% | 11.58% |
| Return on assets |  |  |  | 14.65% | 13.05% | 12.06% | 8.94% | 12.57% | 6.22% | 4.75% | 4.85% | 4.92% | 7.44% |
| Liabilities / equity |  |  |  | 0.56 | 0.69 | 0.57 | 0.57 | 0.67 | 0.75 | 0.72 | 0.73 | 0.61 | 0.56 |
| Current ratio |  |  |  | 4.11 | 2.86 | 3.11 | 3.47 | 3.53 | 2.86 | 2.69 | 2.64 | 2.89 | 3.38 |

## As-reported value updates

4 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/HCSG/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000731012.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q3 | 2022-09-30 |  |  | 0.00 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | 0.17 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 |  |  | 0.12 | reported discrete quarter |
| 2023-Q3 | 2023-06-30 |  | 8,598,000 |  | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 411,388,000 |  | -0.07 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 423,840,000 | 22,598,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 423,433,000 | 15,309,000 | 0.21 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 |  | 15,309,000 |  | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 426,288,000 |  | -0.02 | reported discrete quarter |
| 2024-Q3 | 2024-06-30 |  | -1,788,000 |  | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 428,149,000 |  | 0.19 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 437,812,000 | 11,920,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 447,662,000 | 17,228,000 | 0.23 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 |  | 17,228,000 |  | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 458,491,000 |  | -0.44 | reported discrete quarter |
| 2025-Q3 | 2025-06-30 |  | -32,366,000 |  | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 464,338,000 |  | 0.59 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 466,682,000 | 31,244,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 462,766,000 | 26,060,000 | 0.37 | reported discrete quarter |
| 2026-Q2 | 2026-03-31 |  | 26,060,000 |  | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 470,808,000 |  | 0.32 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Risk Factors

Verbatim Item 1A Risk Factors from HCSG's latest 10-K: [/company/HCSG/risk-factors/](/company/HCSG/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/731012/000073101226000046/hcsg-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary.
Confidence: high
Filing date: 2026-07-24
Report date: 2026-06-30

Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

The following discussion is intended to provide the reader with information that will be helpful in understanding our financial statements, including the changes in certain key items when comparing financial statements period to period. We also intend to provide the primary factors that accounted for those changes as well as a summary of how certain accounting principles affect our financial statements. In addition, we are providing information about the financial results of our two operating segments to further assist in understanding how these segments and their results affect our consolidated results of operations. This discussion should be read in conjunction with our financial statements as of June 30, 2026 and December 31, 2025 and the notes accompanying those financial statements.

Overview

We provide management, administrative and operating expertise and services to housekeeping, laundry, linen, facility maintenance and dietary service departments primarily in healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. We provide such services to more than 3,000 facilities throughout the continental United States as of June 30, 2026. We believe we are the largest provider of housekeeping, laundry and dietary management services to the long-term care industry in the United States.

We provide services primarily pursuant to full-service agreements with our customers. Under such agreements, we are responsible for the day-to-day management of the employees located at our customers’ facilities, as well as for the provision of certain supplies. We also provide services on the basis of management-only agreements for a limited number of customers. Under a management-only agreement, we provide management and supervisory services while the customer facility retains payroll responsibility for the non-supervisory staff. In certain management-only agreements, the Company maintains responsibility for purchasing supplies. Our agreements with customers typically provide for a renewable service term cancellable by either party upon 30 to 90 days’ notice after an initial period of 60 to 120 days.

We are organized into two reportable segments: housekeeping, laundry, linen and other services (“Environmental Services” or “EVS”) and dietary department services (“Dietary”).

Environmental Services consists of managing the customers’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of a customer’s facility, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at a customer facility. Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate housekeeping services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation. On-site management is responsible for all daily customer housekeeping department activities with regular support provided by a District Manager specializing in such services.

Dietary services consist of managing our customers’ dietary departments, which are principally responsible for food purchasing, meal preparation and professional dietitian services, which include the development of menus that meet the dietary needs of residents. On-site management is responsible for all daily dietary department activities with regular support provided by a District Manager specializing in dietary services. We also offer clinical consulting services to our dietary customers which may be provided as a standalone service or be bundled with other dietary department services. Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate dietitian services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.

EVS services were provided to approximately 2,300 customer facilities at June 30, 2026 and contributed approximately 45.1% or $421.5 million of our consolidated revenues for the six months ended June 30, 2026. Dietary services were provided at approximately 1,600 customer facilities at June 30, 2026, generating approximately 54.9% or $512.1 million of our total revenues for the six months ended June 30, 2026.

37

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Three Months Ended June 30, 2026 and 2025

The following table summarizes the income statement key components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the three months ended June 30, 2026 and 2025.

[[GREPCENT_TABLE]]
[["","Three Months Ended June 30,"],["","2026","","2025","","% Change"],["","(in thousands)"],["Revenues"],["EVS","$","213,204","","","$","205,743","","","3.6","%"],["Dietary","257,604","","","252,748","","","1.9","%"],["Consolidated","$","470,808","","","$","458,491","","","2.7","%"],["Costs of services provided"],["EVS","$","172,451","","","$","192,021","","","(10.2)","%"],["Dietary","223,564","","","263,512","","","(15.2)","%"],["Consolidated","$","396,015","","","$","455,533","","","(13.1)","%"],["Selling, general and administrative expense"],["EVS","$","12,435","","","$","12,059","","","3.1","%"],["Dietary","14,729","","","14,708","","","0.1","%"],["Corporate1","18,529","","","17,747","","","4.4","%"],["Gain on deferred compensation plan investments","6,892","","","4,649","","","48.2","%"],["Consolidated","$","52,585","","","$","49,163","","","7.0","%"],["Other income (expense)2"],["Investment and other income, net","$","9,414","","","$","4,735","","","98.8","%"],["Interest expense","(619)","","","(418)","","","48.1","%"],["Income (loss) before taxes","$","31,003","","","$","(41,888)","","","(174.0)","%"],["Income tax expense (benefit)","8,307","","","(9,522)","","","(187.2)","%"],["Net income (loss)","$","22,696","","","$","(32,366)","","","(170.1)","%"]]
[[/GREPCENT_TABLE]]

1.Represents selling, general and administrative expense less amounts allocated to segments for labor and labor-related and other segment items.

2.These line items represent corporate costs not allocated to segments.

38

Table of Contents

EVS and Dietary revenues represented approximately 45.3% and 54.7% of consolidated revenues for the three months ended June 30, 2026, respectively.

The following table sets forth the ratio of certain items to consolidated revenues:

[[GREPCENT_TABLE]]
[["","Three Months Ended June 30,"],["","2026","","2025"],["Revenues","100.0","%","","100.0","%"],["Operating costs and expenses:"],["Costs of services provided","84.1","%","","99.4","%"],["Selling, general and administrative","11.2","%","","10.7","%"],["Other income (expense):"],["Investment and other income, net","2.0","%","","1.0","%"],["Interest expense","(0.1)","%","","(0.1)","%"],["Income (loss) before income taxes","6.6","%","","(9.1)","%"],["Income tax provision (benefit)","1.8","%","","(2.1)","%"],["Net income (loss)","4.8","%","","(7.0)","%"]]
[[/GREPCENT_TABLE]]

Revenues

Consolidated

Consolidated revenues increased 2.7% to $470.8 million during the three months ended June 30, 2026 compared to $458.5 million for the corresponding period in 2025 as a result of the factors discussed below under Reportable Segments.

Reportable Segments

EVS revenues increased 3.6% and Dietary revenues increased 1.9% during the three months ended June 30, 2026 compared to the corresponding period in 2025. The increase in revenues was driven by client wins and retention, driven by consistent service execution across our customer facilities, contractual price increases and increased pass-through costs to customers.

Costs of Services Provided

Consolidated

Consolidated costs of services provided decreased by 13.1% to $396.0 million for the three months ended June 30, 2026 compared to $455.5 million for the corresponding period in 2025 as a result of the factors discussed below under Reportable Segments and due to the timing of customer restructurings and adjustments to our actuarial liabilities during each period. Costs of services provided, as a percentage of revenues, was 84.1% for the three months ended June 30, 2026 compared to 99.4% for the same period in 2025. During the three months ended June 30, 2025, we recognized $61.2 million of bad debt expense within costs of services provided due to large customer bankruptcies. During the three months ended June 30, 2026 and 2025, updates to our loss estimates for workers’ compensation and general liability reduced costs of services provided by $1.3 million and $6.2 million, respectively.

Reportable Segments

We include certain expenses classified as selling, general and administrative expenses within segment expenses. Segment expenses for EVS, as a percentage of EVS revenues, decreased to 86.7% for the three months ended June 30, 2026 from 99.2% in the corresponding period in 2025. Segment expenses for Dietary, as a percentage of Dietary revenues, decreased to 92.5% for the three months ended June 30, 2026 from 110.1% in the corresponding period in 2025.

39

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The following tables provide a comparison of the key indicators we consider when managing segment expenses as a percentage of the respective segment’s revenues:

[[GREPCENT_TABLE]]
[["","","Three Months Ended June 30,"],["Key Indicators as a % of Segment Revenue - EVS","","2026","","2025","","Change"],["Labor and labor-related costs1","","76.6%","","77.5%","","(0.9)%"],["Supplies","","7.3%","","6.9%","","0.4%"],["Bad debt expense","","0.5%","","12.1%","","(11.6)%"],["Depreciation and amortization","","0.6%","","0.6%","","\u2014%"],["Other costs1","","1.7%","","2.1%","","(0.4)%"],["Total segment expenses","","86.7%","","99.2%","","(12.5)%"]]
[[/GREPCENT_TABLE]]

1.Inclusive of certain expenses reported within selling, general and administrative expense that are segment-specific.

[[GREPCENT_TABLE]]
[["","","Three Months Ended June 30,"],["Key Indicators as a % of Segment Revenue - Dietary","","2026","","2025","","Change"],["Labor and labor-related costs1","","58.2%","","57.7%","","0.5%"],["Supplies","","30.5%","","30.6%","","(0.1)%"],["Bad debt expense","","1.2%","","18.7%","","(17.5)%"],["Depreciation and amortization","","0.3%","","0.6%","","(0.3)%"],["Other costs1","","2.3%","","2.4%","","(0.1)%"],["Total segment expenses","","92.5%","","110.1%","","(17.6)%"]]
[[/GREPCENT_TABLE]]

1.Inclusive of certain expenses reported within selling, general and administrative expense that are segment-specific.

Variations within these key indicators relate to the provision of services at new facilities, changes in the mix of customers for whom we provide supplies or do not provide supplies, changes in the services provided to certain customers and changes in bad debt expense. Management focuses on building efficiencies and managing labor and other costs at the facility level, as well as managing supply chain costs, for new and existing facilities, and has also evaluated the impact of recent tariff and trade policy changes, which to date have not had a material impact on our operations or financial results as such costs are generally passed through to customers.

Consolidated Selling, General and Administrative Expense

Selling, general and administrative expense incurred at a segment-level is discus

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/731012/000073101226000009/hcsg-20251231.htm
Complete FY 2025 MD&A: /company/HCSG/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high
Filing date: 2026-02-13
Report date: 2025-12-31

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of our operations in conjunction with our Consolidated Financial Statements and the related notes to those statements included elsewhere in this report. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors,” and elsewhere in this report on Form 10-K. We are on a calendar year end, and except where otherwise indicated, “2025” refers to the year ended December 31, 2025, and “2024” refers to the year ended December 31, 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Results of Operations

The following discussion is intended to provide the reader with information that will be helpful in understanding our financial statements, including the changes in certain key items when comparing financial statements period to period. We also intend to provide the primary factors that accounted for those changes as well as a summary of how certain accounting principles affect our financial statements. In addition, we are providing information about the financial results of our two operating segments to further assist in understanding how these segments and their results affect our consolidated results of operations. This discussion should be read in conjunction with our consolidated financial statements as of and for the years ended December 31, 2025 and 2024 and the notes accompanying those financial statements.

Overview

We provide management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of primarily healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. We provide such services to approximately 2,800 facilities throughout the continental United States as of December 31, 2025. We believe we are the largest provider of housekeeping, laundry and dietary management services to the long-term care industry in the United States.

18

Table of Contents

We provide services primarily pursuant to full-service agreements with our customers. Under such agreements, we are responsible for the day-to-day management of the employees located at our customers’ facilities, as well as for the provision of certain supplies. We also provide services on the basis of management-only agreements for a limited number of customers. Under a management-only agreement, we provide management and supervisory services while the customer facility retains payroll responsibility for the non-supervisory staff. In certain management-only agreements, the Company maintains responsibility for purchasing supplies. Our agreements with customers typically provide for a renewable service term cancellable by either party upon 30 to 90 days’ notice after an initial period of 60 to 120 days.

We are organized into two reportable segments: housekeeping, laundry, linen and other services (“Environmental Services” or “EVS”), and dietary department services (“Dietary”).

EVS services consist of managing our customers’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of the customers’ facilities, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at the customers’ facilities. Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate housekeeping services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation. On-site management is responsible for all daily customer housekeeping department activities with regular support provided by a District Manager specializing in such services.

Dietary services consist of managing our customers’ dietary departments, which are principally responsible for food purchasing, meal preparation and professional dietitian services, which include the development of menus that meet the dietary needs of residents. On-site management is responsible for all daily dietary department activities with regular support provided by a District Manager specializing in dietary services. We also offer clinical consulting services to our dietary customers which may be provided as a standalone service or be bundled with other dietary department services. Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate dietitian services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.

EVS services were provided to approximately 2,300 customer facilities at December 31, 2025 and contributed approximately 44.9% or $824.7 million of our consolidated revenues for the year ended December 31, 2025. Dietary services were provided to approximately 1,600 customer facilities at December 31, 2025 and contributed approximately 55.1% or $1,012.5 million of our consolidated revenues for the year ended December 31, 2025.

Our ability to acquire new customers, retain existing customers and increase revenues are affected by many factors. Competitive factors consist primarily of competing with potential customers’ use of in-house support staff, as well as a number of firms which compete with us in the regional and national markets in which we conduct business. We believe the primary revenue drivers of our business are our ability to obtain new customers and to provide additional services to existing customers. In addition, although there can be no assurance, we seek to pass through, by means of service billing increases, increases in our cost of providing the services, while also aiming to obtain modest revenue increases from our existing customers to attain desired profit margins at the facility level. The primary economic factor in acquiring new customers is our ability to demonstrate the cost-effectiveness of our services. The primary operational factor is our ability to demonstrate to potential customers the benefits of being relieved of the administrative and operational challenges related to the day-to-day management of their housekeeping and dietary operations. In addition, we must be able to assure new customers that we can improve the quality of service that they are providing to their residents. We believe the factors discussed above are equally applicable to each of our segments with respect to acquiring new customers and increasing revenues.

Our expenses vary and may impact our operating performance. We review costs of labor, costs of supplies, bad debt expense and depreciation and amortization expense, along with other segment expenses, to evaluate our operating performance. The variability of these costs may impact each segment differently, as EVS’s percentage of revenue is more significantly impacted by costs of labor than that of Dietary, while Dietary’s percentage of revenue is more significantly impacted by costs of supplies than EVS. Bad debt expense impacts costs of services provided for each segment periodically depending on specific customer matters for each segment.

19

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EVS labor costs accounted for approximately 78.3% of EVS revenues in 2025 while Dietary labor costs accounted for approximately 58.8% of Dietary revenues in 2025. Changes in wage rates as a result of legislative or collective bargaining actions, market factors, adjustments to staffing levels and other variations in our use of labor or managing labor costs can result in variability of these costs. Housekeeping supplies, including linen products, accounted for approximately 7.2% of EVS revenues in 2025. In contrast, food supplies consumed in performing our Dietary services accounted for approximately 30.9% of Dietary revenues. Generally, fluctuations in these expenses are influenced by factors outside of our control and are unpredictable. EVS and Dietary supplies are principally commodity products and are affected by market conditions specific to the respective products.

Our customers are concentrated in the healthcare industry and are primarily providers of long-term care. Many of our customers’ revenues are highly reliant on Medicare, Medicaid and third-party payers’ reimbursement funding. Legislation can significantly alter overall government reimbursement for nursing home services and such changes, as well as other trends in the long-term care industry, have affected and could adversely affect our customers’ cash flows, resulting in their inability to make payments to us in accordance with agreed-upon payment terms. The climate of legislative uncertainty has posed, and will continue to pose, both risks and opportunities for us. The risks are related to our customers’ cash flows and solvency, while the opportunities are related to our ability to offer our customers cost stability and efficiencies. A large portion of our revenues are derived from nursing home operators whose portfolio of facilities managed are in multiple states, and as such, the ultimate impact, including in terms of timing and scale, as a result of legislative changes can be difficult to predict. However, our customer’s obligation to pay the Company in accordance with the contract is not contingent upon the customer’s cash flow. Notwithstanding the Company’s efforts to minimize its credit risk exposure, the aforementioned factors, as well as other factors that impact customer cash flows or their ability to make timely payments, could have a material adverse effect on the Company’s results of operations and financial condition.

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Years Ended December 31, 2025 and 2024

The following table summarizes the income statement key components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the years ended December 31, 2025 and 2024.

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/HCSG/mda/fy2025/
All MD&A years: /company/HCSG/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/HCSG/mda/fy2024/): filed 2025-02-14; accession 0000731012-25-000032 (https://www.sec.gov/Archives/edgar/data/731012/000073101225000032/hcsg-20241231.htm)
- [FY 2023 MD&A](/company/HCSG/mda/fy2023/): filed 2024-02-16; accession 0000731012-24-000025 (https://www.sec.gov/Archives/edgar/data/731012/000073101224000025/hcsg-20231231.htm)
- [FY 2022 MD&A](/company/HCSG/mda/fy2022/): filed 2023-02-17; accession 0000731012-23-000024 (https://www.sec.gov/Archives/edgar/data/731012/000073101223000024/hcsg-20221231.htm)
- [FY 2021 MD&A](/company/HCSG/mda/fy2021/): filed 2022-02-18; accession 0000731012-22-000026 (https://www.sec.gov/Archives/edgar/data/731012/000073101222000026/hcsg-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 8050 Services-Nursing & Personal Care Facilities) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [PCE](/indicator/PCE/): Personal Consumption Expenditures
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [UNRATE](/indicator/UNRATE/): Unemployment Rate
- [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income

Macro-to-micro threads including this sector: [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/HCSG.md · JSON record: /company/HCSG.json · verified financials: /company/HCSG/financials.json / /company/HCSG/financials.csv · machine TOC for the whole site: /llms.txt