Healthcare Services Group, Inc.

Healthcare Services Group, Inc. (NASDAQ: HCSG) is a Pennsylvania-based provider of management, administrative and operating services to healthcare facilities throughout the United States. The company operates through its website at www.hcsgcorp.com and serves approximately 2,800 facilities across the continental United States as the largest provider of housekeeping, laundry and dietary management services to the long-term care industry.

The company operates two reportable business segments. Environmental Services, which accounts for approximately 44.9 percent of consolidated revenues, encompasses housekeeping, laundry and linen management services. This segment manages customer facility housekeeping departments responsible for cleaning, disinfecting and sanitizing resident rooms and common areas, as well as laundering bed linens, uniforms and resident clothing. Environmental Services labor costs represent approximately 78.3 percent of segment revenues, while supply costs account for 7.2 percent. The Dietary segment represents approximately 55.1 percent of consolidated revenues and manages customer dietary departments responsible for food purchasing, meal preparation and professional dietitian services. Dietary labor and food-related supplies represent approximately 58.8 percent and 30.9 percent of segment revenues respectively.

Healthcare Services Group provides services to approximately 2,300 facilities through Environmental Services and approximately 1,600 facilities through Dietary services. The company employs approximately 36,000 people, including approximately 4,000 corporate and field management personnel. Services are delivered primarily through full-service agreements where the company manages day-to-day employee operations and provides supplies, though management-only agreements are offered for a limited number of customers.

The company's customers consist primarily of long-term and post-acute care facilities including skilled nursing facilities, residential care and assisted living facilities, rehabilitation centers and hospitals. Service agreements typically provide for renewable terms cancellable by either party upon 30 to 90 days' notice after initial periods of 60 to 120 days. The company markets its services through referrals, direct solicitation, industry trade shows and healthcare advocacy association events. Healthcare Services Group maintains a hierarchical operational management structure consisting of facility managers, district managers, directors of operations and vice presidents of operations overseeing service delivery across its geographic footprint.