Document and Entity Information
Document and Entity Information - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Oct. 26, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | HEALTHCARE SERVICES GROUP INC | |
Entity Central Index Key | 731,012 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 72,587 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 24,327 | $ 33,189 |
Marketable securities, at fair value | 80,623 | 69,496 |
Accounts and notes receivable, less allowance for doubtful accounts of $6,376,000 as of September 30, 2016 and $4,608,000 as of December 31, 2015 | 265,533 | 214,854 |
Inventories and supplies | 37,603 | 36,308 |
Prepaid expenses and other | 16,382 | 11,495 |
Total current assets | 424,468 | 365,342 |
Property and equipment, net | 13,275 | 13,086 |
Goodwill | 44,438 | 44,438 |
Other intangible assets, less accumulated amortization of $14,065,000 as of September 30, 2016 and $19,473,000 as of December 31, 2015 | 15,016 | 17,108 |
Notes receivable - long term portion | 4,048 | 2,972 |
Deferred compensation funding, at fair value | 26,332 | 25,391 |
Deferred income taxes | 9,198 | 12,567 |
Other noncurrent assets | 48 | 45 |
TOTAL ASSETS | 536,823 | 480,949 |
Current liabilities: | ||
Accounts payable | 39,529 | 41,472 |
Accrued payroll, accrued and withheld payroll taxes | 37,850 | 18,062 |
Other accrued expenses | 2,767 | 3,115 |
Income taxes payable | 9,332 | 3,212 |
Accrued legal expenses | 2,284 | 10,464 |
Accrued insurance claims | 23,907 | 19,740 |
Total current liabilities | 115,669 | 96,065 |
Accrued insurance claims - long term portion | 63,213 | 62,510 |
Deferred compensation liability | 26,837 | 25,918 |
Commitments and contingencies | ||
STOCKHOLDERS’ EQUITY: | ||
Common stock, $.01 par value; 100,000,000 shares authorized; 74,187,000 and 73,793,000 shares issued, and 72,510,000 and 72,034,000 shares outstanding as of September 30, 2016 and December 31, 2015, respectively | 742 | 738 |
Additional paid-in capital | 215,531 | 199,294 |
Retained earnings | 124,134 | 106,886 |
Accumulated other comprehensive income, net of taxes | 1,308 | 543 |
Common stock in treasury, at cost; 1,677,000 shares as of September 30, 2016 and 1,759,000 shares as of December 31, 2015 | (10,611) | (11,005) |
Total stockholders’ equity | 331,104 | 296,456 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 536,823 | $ 480,949 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Allowance for doubtful accounts | $ 6,376 | $ 4,608 |
Accumulated amortization of other intangible assets | $ 14,065 | $ 19,473 |
STOCKHOLDERS’ EQUITY: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock issued (in shares) | 74,187,000 | 73,793,000 |
Common stock outstanding (in shares) | 72,510,000 | 72,034,000 |
Common stock in treasury (in shares) | 1,677,000 | 1,759,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenues | $ 392,734 | $ 360,165 | $ 1,164,097 | $ 1,070,767 |
Operating costs and expenses: | ||||
Costs of services provided | 336,340 | 308,645 | 998,595 | 916,798 |
Selling, general and administrative expense | 27,182 | 23,445 | 78,192 | 75,332 |
Other income (expense), net: | ||||
Investment and interest | 1,359 | (1,334) | 2,548 | (585) |
Income before income taxes | 30,571 | 26,741 | 89,858 | 78,052 |
Income tax provision | 10,860 | 9,655 | 32,761 | 29,162 |
Net income | $ 19,711 | $ 17,086 | $ 57,097 | $ 48,890 |
Per share data: | ||||
Basic earnings per common share (in dollars per share) | $ 0.27 | $ 0.24 | $ 0.79 | $ 0.68 |
Diluted earnings per common share (in dollars per share) | $ 0.27 | $ 0.24 | $ 0.78 | $ 0.68 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 72,839 | 72,009 | 72,718 | 71,714 |
Diluted (in shares) | 73,592 | 72,691 | 73,435 | 72,381 |
Comprehensive income: | ||||
Net income | $ 19,711 | $ 17,086 | $ 57,097 | $ 48,890 |
Other comprehensive income: | ||||
Unrealized gain (loss) on available for sale marketable securities, net of taxes | (369) | 198 | 765 | 181 |
Total comprehensive income | $ 19,342 | $ 17,284 | $ 57,862 | $ 49,071 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 57,097 | $ 48,890 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 5,632 | 5,678 |
Bad debt provision | 3,200 | 2,225 |
Deferred income tax expense | 2,748 | 20,767 |
Stock-based compensation expense | 3,113 | 2,567 |
Tax benefit from equity compensation plans, gross | (1,750) | (1,062) |
Amortization of premium on marketable securities | 1,053 | 314 |
Unrealized gain on deferred compensation fund investments | (1,041) | 939 |
Changes in operating assets and liabilities: | ||
Accounts and notes receivable | (54,954) | (11,170) |
Inventories and supplies | (1,295) | (425) |
Prepaid expenses and other assets | (5,279) | (2,020) |
Deferred compensation funding | (941) | 836 |
Accounts payable and other accrued expenses | (6,774) | (7,703) |
Accrued payroll, accrued and withheld payroll taxes | 22,065 | (18,189) |
Accrued insurance claims | 4,870 | 11,384 |
Deferred compensation liability | 2,284 | (1,415) |
Income taxes payable | 7,870 | 889 |
Net cash provided by operating activities | 37,898 | 52,505 |
Cash flows from investing activities: | ||
Disposals of fixed assets | 177 | 248 |
Additions to property and equipment | (3,908) | (3,975) |
Purchases of marketable securities | (18,751) | (52,219) |
Sales of marketable securities | 8,137 | 4,786 |
Net cash used in investing activities | (14,345) | (51,160) |
Cash flows from financing activities: | ||
Dividends paid | (39,849) | (38,338) |
Reissuance of treasury stock pursuant to Dividend Reinvestment Plan | 84 | 83 |
Tax benefit from equity compensation plans, gross | 1,750 | 1,062 |
Proceeds from the exercise of stock options | 5,600 | 4,937 |
Net cash used in financing activities | (32,415) | (32,256) |
Net change in cash and cash equivalents | (8,862) | (30,911) |
Cash and cash equivalents at beginning of the period | 33,189 | 75,280 |
Cash and cash equivalents at end of the period | 24,327 | 44,369 |
Supplementary cash flow information: | ||
Cash paid for interest | 441 | 137 |
Cash paid for income taxes, net of refunds | $ 22,141 | $ 7,508 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income, net of taxes | Retained Earnings | Treasury Stock |
Balance at Dec. 31, 2014 | $ 25 | |||||
Comprehensive income: | ||||||
Net income for the period | $ 48,890 | |||||
Unrealized gain on available for sale marketable securities, net of taxes | 181 | |||||
Total comprehensive income | 49,071 | |||||
Balance at Sep. 30, 2015 | 206 | |||||
Balance (in shares) at Dec. 31, 2015 | 73,793 | |||||
Balance at Dec. 31, 2015 | 296,456 | $ 738 | $ 199,294 | 543 | $ 106,886 | $ (11,005) |
Comprehensive income: | ||||||
Net income for the period | 57,097 | 57,097 | ||||
Unrealized gain on available for sale marketable securities, net of taxes | 765 | 765 | ||||
Total comprehensive income | 57,862 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered (in shares) | 284 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered | 5,600 | $ 3 | 5,597 | |||
Tax benefit from equity compensation plans | 1,540 | 1,540 | ||||
Share-based compensation expense — stock options and restricted stock | 2,810 | 2,810 | ||||
Treasury shares issued for Deferred Compensation Plan funding and redemptions | 534 | 325 | 209 | |||
Shares issued pursuant to Employee Stock Purchase Plan | 2,067 | 1,696 | 371 | |||
Cash dividends | (39,849) | (39,849) | ||||
Shares issued pursuant to Dividend Reinvestment Plan | 84 | 270 | (186) | |||
Shares issued pursuant to settlement (in shares) | 113 | |||||
Shares issued pursuant to settlement | 4,000 | $ 1 | 3,999 | |||
Balance (in shares) at Sep. 30, 2016 | 74,187 | |||||
Balance at Sep. 30, 2016 | $ 331,104 | $ 742 | $ 215,531 | $ 1,308 | $ 124,134 | $ (10,611) |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business and Significant Accounting Policies | Description of Business and Significant Accounting Policies Nature of Operations Healthcare Services Group, Inc. (the “Company”) provides management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of the health care industry, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. Although we do not directly participate in any government reimbursement programs, our clients’ reimbursements are subject to government regulation. Therefore, they are directly affected by any legislation relating to Medicare and Medicaid reimbursement programs. We provide our services primarily pursuant to full service agreements with our clients. In such agreements, we are responsible for the day-to-day management of employees located at our clients’ facilities. We also provide services on the basis of management-only agreements for a limited number of clients. Our agreements with clients typically provide for renewable one year service terms, cancelable by either party upon 30 to 90 days notice after the initial 60 to 120 day period. We are organized into two reportable segments: housekeeping, laundry, linen and other services (“Housekeeping”), and dietary department services (“Dietary”). Housekeeping consists of the managing of clients’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of patient rooms and common areas of a client’s facility, as well as the laundering and processing of the personal clothing belonging to the facility’s patients. Also within the scope of this segment’s service is the responsibility for laundering and processing of bed linens, uniforms and other assorted linen items utilized by a client facility. Dietary consists of managing clients’ dietary department which is principally responsible for food purchasing, meal preparation and providing dietitian consulting professional services, which includes the development of a menu that meets patients’ dietary needs. Unaudited Interim Financial Data The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, these consolidated financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations and cash flows. However, in our opinion, all adjustments which are of a normal recurring nature and necessary for a fair presentation have been reflected in these consolidated financial statements. The balance sheet shown in this report as of December 31, 2015 has been derived from, and does not include, all of the disclosures contained in the financial statements for the year ended December 31, 2015 . These financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 . The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for any future period. Certain amounts in the prior year financial statements have been reclassified to conform to current presentation. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Healthcare Services Group, Inc. and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents are held in U.S. financial institutions or in custodial accounts with U.S. financial institutions. Cash equivalents are defined as short-term, highly liquid investments with a maturity of three months or less at the time of purchase that are readily convertible into cash and have insignificant interest rate risk. Inventories and Supplies Inventories and supplies include housekeeping, linen and laundry supplies, as well as food provisions and supplies. Inventories and supplies are stated at cost to approximate a first-in, first-out (FIFO) basis. Linen supplies are amortized on a straight-line basis over their estimated useful life of 24 months. Revenue Recognition Revenues from our service agreements with clients are recognized as services are performed. As a distributor of laundry equipment, we occasionally sell laundry installations to certain clients. The sales in most cases represent the construction and installation of a turn-key operation and have payment terms ranging from 24 to 60 months. During the three and nine months ended September 30, 2016 and 2015 , laundry installation sales were not material. Income Taxes We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current period. We accrue for probable tax obligations as required by facts and circumstances in various regulatory environments. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the book and tax bases of assets and liabilities. When appropriate, valuation allowances are recorded to reduce deferred tax assets to amounts for which realization is more likely than not. Uncertain income tax positions taken or expected to be taken in tax returns are reflected within our financial statements based on a recognition and measurement process. Earnings per Common Share Basic earnings per common share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share are calculated using the weighted-average number of common shares outstanding and dilutive common shares, such as those issuable upon exercise of stock options. Share-Based Compensation The Company recognizes compensation expense for share-based awards and programs for employees and directors. We estimate the fair value of stock options as of the date of grant using a Black-Scholes option valuation model, while share-based awards are valued based on the market-price on the date of grant. The value of the portion of the award that is ultimately expected to vest, after accounting for forfeitures, is recognized as an expense in the Company’s consolidated statements of comprehensive income ratably over the requisite service periods. Use of Estimates in Financial Statements In preparing financial statements in conformity with U.S. GAAP, we make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Significant estimates are used in determining, but are not limited to, our allowance for doubtful accounts, accrued insurance claims, asset valuations, deferred taxes and reviews for potential impairment. The estimates are based upon various factors including current and historical trends, as well as other pertinent industry and regulatory authority information. We regularly evaluate this information to determine if it is necessary to update the basis for our estimates and to adjust for known changes. Self-Funded Captive Insurance Programs In 2015, the Company transitioned its workers compensation and certain employee health & welfare insurance programs to HCSG Insurance Corp. (“HCSG Insurance”), its wholly owned captive insurance subsidiary which previously provided only general liability coverage to the Company. HCSG Insurance was formed to provide the Company with greater efficiency in managing its property & casualty and health & welfare programs. Concentrations of Credit Risk Our financial instruments consist principally of cash and cash equivalents, marketable securities, deferred compensation funding and accounts and notes receivable. Our marketable securities are fixed income investments which are highly liquid and can be readily purchased or sold through established markets. At September 30, 2016 and December 31, 2015 , substantially all of our cash and cash equivalents and marketable securities were held in one large financial institution located in the United States. Our clients are concentrated in the health care industry and are primarily providers of long-term care. Many of our clients’ revenues are highly reliant on Medicare, Medicaid and third party payors’ reimbursement funding rates. 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 the liquidity of our clients, resulting in their inability to make payments to us in accordance with agreed upon payment terms. These factors could result in the recognition of significant additional bad debts in the future. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments . The update replaces the current incurred loss impairment methodology of recognizing credit losses with a methodology that instead reflects expected credit losses and requires consideration of a broader range of information to inform credit loss estimates. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, with early adoption permitted for fiscal years and interim periods beginning after December 15, 2018. The Company is in the process of evaluating the impact of the adoption of this ASU. In March 2016, the FASB issued ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 is intended to simplify several aspects of the accounting for share-based payments. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is in the process of evaluating the impact of the adoption of this ASU. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , and a subsequent amendment to the standard in March 2016 with ASU 2016-08. The original standard provides guidance on recognizing revenue, including a five step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment to the standard clarifies implementation guidance on principal versus agent considerations. Adoption of the new standard is effective for reporting periods beginning after December 15, 2017, with early adoption prohibited. The Company is in the process of evaluating the impact of the adoption of this ASU. In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information regarding the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements and associated disclosures. Balance Sheet Classification of Deferred Taxes . The amendment in this ASU requires that deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in a classified statement of financial position. The guidance becomes effective for annual reporting periods beginning after December 15, 2016 with early adoption permitted. Management elected to adopt the standard in the first quarter of 2016, with retrospective application to prior period balances presented. The adoption of ASU 2015-17 did not have a material impact on the Company’s consolidated financial statements. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income by Component | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Changes in Accumulated Other Comprehensive Income by Component | Changes in Accumulated Other Comprehensive Income by Component Accumulated other comprehensive income consists of unrealized gains and losses from our available for sale marketable securities. The following table provides a summary of the changes in accumulated other comprehensive income for the nine months ended September 30, 2016 and 2015 : Unrealized Gains and Losses on Available for Sale Securities (1) Nine Months Ended September 30, 2016 2015 Accumulated other comprehensive income — beginning balance $ 543,000 $ 25,000 Other comprehensive income before reclassifications 914,000 184,000 Amounts reclassified from accumulated other comprehensive income (2)(3) (149,000 ) (3,000 ) Net current period change in other comprehensive income 765,000 181,000 Accumulated other comprehensive income — ending balance $ 1,308,000 $ 206,000 (1) All amounts are net of tax. (2) Realized gains and losses are recorded pre-tax under “Other income - Investment and interest” on our consolidated statements of comprehensive income. (3) For the nine months ended September 30, 2016 and 2015 , the Company recorded $226,000 and $5,000 , respectively, of realized gains from the sale of available for sale securities. Refer to Note 5 herein for further information. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is recorded over the estimated useful life of each class of depreciable assets, and is computed using the straight-line method. Leasehold improvements are amortized over the shorter of the estimated asset life or term of the lease. Repairs and maintenance costs are charged to expense as incurred. The following table sets forth the amounts of property and equipment by each class of depreciable assets as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 Housekeeping and office equipment and furniture $ 31,763,000 $ 29,852,000 Laundry and linen equipment installations 1,201,000 1,117,000 Autos and trucks 138,000 138,000 Total property and equipment, at cost 33,102,000 31,107,000 Less accumulated depreciation 19,827,000 18,021,000 Total property and equipment, net $ 13,275,000 $ 13,086,000 Depreciation expense for the three months ended September 30, 2016 and 2015 was $1,114,000 and $1,036,000 , respectively. Depreciation expense for the nine months ended September 30, 2016 and 2015 was $3,541,000 and $3,247,000 , respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill And Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of the net assets of an acquired business. Goodwill is not amortized, but is evaluated for impairment on an annual basis, or more frequently if impairment indicators arise. Goodwill by reportable operating segment, as described in Note 10 herein, was approximately $42,377,000 and $2,061,000 for Housekeeping and Dietary, respectively, as of September 30, 2016 and December 31, 2015 . Intangible Assets Our intangible assets represent customer relationships and non-compete agreements related to business combinations. The cost of intangible assets is based on fair values at the date of acquisition. Intangible assets with determinable lives are amortized on a straight-line basis over their estimated useful lives. The customer relationships have a weighted-average amortization period of nine years. The following table sets forth the amounts of our identifiable intangible assets subject to amortization: September 30, 2016 December 31, 2015 Customer relationships $ 29,081,000 $ 35,781,000 Non-compete agreements — 800,000 Total other intangibles, gross 29,081,000 36,581,000 Less accumulated amortization 14,065,000 19,473,000 Other intangibles, net $ 15,016,000 $ 17,108,000 The following table sets forth the estimated amortization expense for intangibles subject to amortization for the remainder of 2016 , the following five fiscal years and thereafter: Period/Year Total Amortization Expense October 1 to December 31, 2016 $ 607,000 2017 $ 2,427,000 2018 $ 2,328,000 2019 $ 2,130,000 2020 $ 2,130,000 2021 $ 2,130,000 Thereafter $ 3,264,000 Amortization expense for the three months ended September 30, 2016 and 2015 was $607,000 and $811,000 , respectively. Amortization expense for the nine months ended September 30, 2016 and 2015 was $2,092,000 and $2,431,000 , respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables provide details of our financial assets measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 and the basis for those measurements: As of September 30, 2016 Fair Value Measurement Using: Carrying Amount Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets: Marketable securities Municipal bonds — available for sale $ 80,623,000 $ 80,623,000 $ — $ 80,623,000 $ — Deferred compensation fund Money Market (1) $ 5,791,000 $ 5,791,000 $ — $ — $ — Balanced and Lifestyle 6,821,000 6,821,000 6,821,000 — — Large Cap Growth 5,636,000 5,636,000 5,636,000 — — Small Cap Growth 2,723,000 2,723,000 2,723,000 — — Fixed Income 2,780,000 2,780,000 2,780,000 — — International 1,183,000 1,183,000 1,183,000 — — Mid Cap Growth 1,398,000 1,398,000 1,398,000 — — Deferred compensation fund $ 26,332,000 $ 26,332,000 $ 20,541,000 $ — $ — As of December 31, 2015 Fair Value Measurement Using: Carrying Amount Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets: Marketable securities Municipal bonds — available for sale $ 69,496,000 $ 69,496,000 $ — $ 69,496,000 $ — Deferred compensation fund Money Market (1) $ 3,896,000 $ 3,896,000 $ — $ — $ — Balanced and Lifestyle 9,136,000 9,136,000 9,136,000 — — Large Cap Growth 5,218,000 5,218,000 5,218,000 — — Small Cap Growth 2,275,000 2,275,000 2,275,000 — — Fixed Income 2,624,000 2,624,000 2,624,000 — — International 1,025,000 1,025,000 1,025,000 — — Mid Cap Growth 1,217,000 1,217,000 1,217,000 — — Deferred compensation fund $ 25,391,000 $ 25,391,000 $ 21,495,000 $ — $ — (1) The fair value of the money market fund is based on the net asset value (“NAV”) of the shares held by the plan at the end of the period. The money market fund includes short-term United States dollar denominated money market instruments and the NAV is determined by the custodian of the fund. The money market fund can be redeemed at its NAV at the measurement date as there are no significant restrictions on the ability to sell this investment. The Company’s marketable securities are classified as available-for-sale and unrealized gains or losses are included in accumulated other comprehensive income (net of tax), until realized. The fair value of these municipal bonds is classified within Level 2 of the fair value hierarchy as these securities are measured using third party pricing service data. The investments under the funded deferred compensation plan are accounted for as trading securities and unrealized gains or losses are included in earnings. The fair value of investments in the funded deferred compensation plan are valued based on quoted market prices (Level 1). The Company’s financial assets and liabilities not measured at fair value on a recurring basis include cash and cash equivalents, accounts and notes receivable, prepaid expenses and accounts payable (including income taxes payable and accrued expenses). The carrying value of these financial instruments approximates their fair value because of their short-term nature. For the three months ended September 30, 2016 , we recorded unrealized losses on marketable securities of $369,000 and for the three months ended September 30, 2015 , we recorded unrealized gains on marketable securities of $198,000 . For the nine months ended September 30, 2016 , we recorded unrealized gains of $765,000 and for the nine months ended September 30, 2015 , we recorded unrealized gains of $181,000 . Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Other-than-temporary Impairments September 30, 2016 Type of security: Municipal bonds — available for sale $ 78,482,000 $ 2,175,000 $ (34,000 ) $ 80,623,000 $ — Total debt securities $ 78,482,000 $ 2,175,000 $ (34,000 ) $ 80,623,000 $ — December 31, 2015 Type of security: Municipal bonds — available for sale $ 68,640,000 $ 869,000 $ (13,000 ) $ 69,496,000 $ — Total debt securities $ 68,640,000 $ 869,000 $ (13,000 ) $ 69,496,000 $ — For the three months ended September 30, 2016 and 2015 , we received total proceeds from sales of available-for-sale municipal bonds, less the amount of interest received, of $2,983,000 and $1,858,000 , respectively. For the three months ended September 30, 2016 , these sales resulted in realized losses of $17,000 which were recorded in other income – investment and interest in our consolidated statements of comprehensive income. The basis for the sale of these securities was the specific identification of each bond sold during the period. For the three months ended September 30, 2015 , there were $2,000 in realized gains . For the nine months ended September 30, 2016 and 2015 , we received total proceeds from sales of available-for-sale municipal bonds, less the amount of interest received, of $8,137,000 and $4,404,000 , respectively. These sales resulted in realized gains of $226,000 and $5,000 , respectively, and were recorded in other income – investment and interest in our consolidated statements of comprehensive income for the nine months ended September 30, 2016 and 2015 . The basis for the sale of these securities was the specific identification of each bond sold during the period. The following table summarizes the contractual maturities of debt securities held at September 30, 2016 and December 31, 2015 , which are classified as marketable securities in the Consolidated Balance Sheet. Municipal Bonds — Available for Sale Contractual maturity: September 30, 2016 December 31, 2015 Maturing in one year or less $ 2,587,000 $ 774,000 Maturing in second year through fifth year 18,411,000 13,852,000 Maturing in sixth year through tenth year 40,748,000 36,273,000 Maturing after ten years 18,877,000 18,597,000 Total debt securities $ 80,623,000 $ 69,496,000 |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation A summary of stock-based compensation expense for the nine months ended September 30, 2016 and 2015 is as follows: Nine Months Ended September 30, 2016 2015 Stock options $ 2,399,000 $ 2,093,000 Restricted stock 412,000 187,000 Employee Stock Purchase Plan 302,000 287,000 Total pre-tax stock-based compensation expense charged against income (1) $ 3,113,000 $ 2,567,000 (1) Stock-based compensation expense is recorded in selling, general and administrative expense in our consolidated statements of comprehensive income. At September 30, 2016 , the unrecognized compensation cost related to unvested stock options and awards was $9,447,000 . The weighted average period over which these awards will vest is approximately 3.0 years. Other information pertaining to activity of our stock awards is as follows: Nine Months Ended September 30, 2016 2015 Total grant-date fair value of stock options and awards granted $ 5,203,000 $ 4,027,000 Total fair value of stock options and awards vested during period $ 3,092,000 $ 2,719,000 2012 Equity Incentive Plan The Company’s 2012 Equity Incentive Plan (the “Plan”) provides that current or prospective officers, employees, non-employee directors and advisors can receive share-based awards such as stock options, restricted stock and other stock awards. The Plan seeks to promote the highest level of performance by providing an economic interest in the long-term success of the Company. As of September 30, 2016 , 3,931,000 shares of common stock were reserved for issuance under the Plan, including 1,282,000 shares available for future grant. No stock award will have a term in excess of ten years. All awards granted under the Plan become vested and exercisable ratably over a five year period on each yearly anniversary of the grant date. The Nominating, Compensation and Stock Option Committee of the Board of Directors is responsible for determining the terms of the grants in accordance with the Plan. Stock Options A summary of our stock options outstanding under the Plan as of December 31, 2015 and changes during the nine months ended September 30, 2016 is as follows: Stock Options Outstanding Number of Shares Weighted Average Exercise Price December 31, 2015 2,461,000 $ 22.16 Granted 569,000 $ 34.14 Cancelled (105,000 ) $ 29.60 Exercised (276,000 ) $ 20.41 September 30, 2016 2,649,000 $ 24.62 The weighted average grant-date fair value of stock options granted during the nine months ended September 30, 2016 and 2015 was $7.46 and $6.64 per common share, respectively. The following table summarizes other information about our stock options at September 30, 2016 : Stock Options Range of exercise prices $10.39 - $34.14 Outstanding: Weighted average remaining contractual life (years) 6.5 Aggregate intrinsic value $ 39,626,000 Exercisable: Number of shares 1,191,000 Weighted average remaining contractual life (years) 4.6 Aggregate intrinsic value $ 25,163,000 Exercised: Aggregate intrinsic value $ 4,581,000 The fair value of stock option awards granted in 2016 and 2015 was estimated on the date of grant using the Black-Scholes option valuation model using the following assumptions: Nine Months Ended September 30, 2016 2015 Risk-free interest rate 2.0% 1.9% Weighted average expected life (years) 5.8 5.8 Expected volatility 26.0% 27.2% Dividend yield 2.0% 2.2% Restricted Stock During the nine months ended September 30, 2016 , the Company granted 44,000 shares of restricted stock with a weighted average grant date fair value of $34.14 per share. Fair value is determined based on the market price of the shares on the date of grant. During the nine months ended September 30, 2015 , the Company granted 25,000 shares of restricted stock with a weighted average grant date fair value of $30.30 per share. A summary of our outstanding stock-based compensation as of December 31, 2015 and changes during the nine months ended September 30, 2016 is as follows: Shares Weighted Average Grant Date Fair Value December 31, 2015 40,000 $ 29.10 Granted 44,000 $ 34.14 Vested (9,000 ) $ 28.76 Forfeited (1,000 ) $ 34.14 September 30, 2016 74,000 $ 32.09 Employee Stock Purchase Plan The Company has an Employee Stock Purchase Plan (“ESPP”) for all eligible employees. On August 1, 2016, the Company adopted an amendment to the ESPP, extending the program through 2021. All full-time and certain part-time employees who have completed two years of continuous service with us are eligible to participate. Annual offerings commence and terminate on the respective year’s first and last calendar day. Under the ESPP, the Company is authorized to issue up to 4,050,000 shares of our common stock to our employees. Pursuant to such authorization, there are 2,362,000 shares available for future grant at September 30, 2016 . The stock-based compensation expense associated the options granted in 2016 and 2015 under our ESPP was estimated on the date of grant using the Black-Scholes option valuation model using the following assumptions: Nine Months Ended September 30, 2016 2015 Risk-free interest rate 0.58% 0.18% Weighted average expected life (years) 1.0 1.0 Expected volatility 19.7% 19.2% Dividend yield 2.0% 2.2% |
Dividends
Dividends | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Dividends | Dividends During the nine months ended September 30, 2016 , we paid regular quarterly cash dividends of approximately $39,849,000 as follows: Quarter Ended March 31, 2016 June 30, 2016 September 30, 2016 Cash dividend per common share $ 0.18125 $ 0.18250 $ 0.18375 Total cash dividends paid $ 13,158,000 $ 13,293,000 $ 13,398,000 Record date February 19, 2016 May 20, 2016 August 19, 2016 Payment date March 25, 2016 June 24, 2016 September 23, 2016 Additionally, on October 11, 2016 , our Board of Directors declared a regular quarterly cash dividend of $0.1850 per common share, which will be paid on December 23, 2016 , to shareholders of record as of the close of business on November 18, 2016 . Cash dividends declared on our outstanding weighted average number of basic common shares for the periods presented were approximately as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Cash dividends per common share $ 0.19 $ 0.18 $ 0.55 $ 0.53 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The 2016 estimated annual effective tax rate is expected to be approximately 36.5% . Differences between the effective tax rate and the applicable U.S. federal statutory rate arise primarily from the effect of state and local income taxes and tax credits available to the Company. The actual 2016 effective tax rate could vary from the estimate depending on the availability of tax credits. We account for income taxes using the asset and liability method, which results in recognizing income tax expense based on the amount of income taxes payable or refundable for the current year. Additionally, we evaluate regularly the tax positions taken or expected to be taken resulting from financial statement recognition of certain items. Based on our evaluation, we have concluded that there are no significant uncertain tax positions requiring recognition in our financial statements. Our evaluation was performed for the tax years ended December 31, 2013 through 2015 (with regard to U.S. federal income tax returns) and December 31, 2011 through 2015 (with regard to various state and local income tax returns), the tax years which remain subject to examination by major tax jurisdictions as of September 30, 2016 . We may from time to time be assessed interest or penalties by taxing jurisdictions, although any such assessments historically have been minimal and immaterial to our financial results. When we have received an assessment for interest and/or penalties, it has been classified in the financial statements as selling, general and administrative expense. In addition, any interest or penalties relating to recognized uncertain tax positions would also be recorded in selling, general and administrative expense. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions A director is a member of a law firm retained by us. In each of the nine months ended September 30, 2016 and 2015 , fees received from us by such firm did not exceed $120,000 . Additionally, such fees did not exceed, in either period, 5% of such firm’s or the Company’s revenues. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Reportable Operating Segments We manage and evaluate our operations in two reportable segments: Housekeeping (housekeeping, laundry, linen and other services) and Dietary (dietary department services). Although both segments serve a similar client base and share many operational similarities, they are managed separately due to differences in the type of services provided, as well as the specialized expertise required of the professional management personnel responsible for delivering the respective segments’ services. Such services are rendered pursuant to distinct service agreements, specific to each reportable segment. The Company’s accounting policies for the segments are generally the same as described in the Company’s significant accounting policies. Differences between the reportable segments’ operating results and other disclosed data and our consolidated financial statements relate primarily to corporate level transactions and recording of transactions at the reportable segment level which use methods other than generally accepted accounting principles. There are certain inventories and supplies that are primarily expensed when incurred within the operating segments, while they are capitalized for the consolidated financial statements. As discussed, most corporate expenses are not allocated to the operating segments. Such expenses include corporate salary and benefit costs, bad debt expense, certain legal costs, information technology costs, depreciation, amortization of finite lived intangible assets, share based compensation costs and other corporate specific costs. Additionally, there are allocations for workers’ compensation and general liability expense within the operating segments that differ from our actual expense recorded for U.S. GAAP. Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues Housekeeping services $ 239,584,000 $ 227,760,000 $ 716,154,000 $ 681,306,000 Dietary services 153,150,000 132,405,000 447,943,000 389,461,000 Total $ 392,734,000 $ 360,165,000 $ 1,164,097,000 $ 1,070,767,000 Income before income taxes Housekeeping services $ 23,645,000 $ 21,770,000 $ 68,966,000 $ 64,139,000 Dietary services 7,884,000 8,239,000 26,103,000 25,008,000 Corporate and eliminations (1) (958,000 ) (3,268,000 ) (5,211,000 ) (11,095,000 ) Total $ 30,571,000 $ 26,741,000 $ 89,858,000 $ 78,052,000 (1) Primarily represents corporate office costs and related overhead, recording of certain inventories and supplies and workers compensation costs at the reportable segment level which use accounting methods that differ from those used at the corporate level, as well as consolidated subsidiaries’ operating expenses that are not allocated to the reportable segments, net of investment and interest income. Total Revenues from Clients We earned total revenues from clients in the following service categories: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Housekeeping services $ 171,802,000 $ 158,019,000 $ 510,080,000 $ 471,692,000 Dietary services 153,150,000 132,405,000 447,943,000 389,461,000 Laundry and linen services 67,363,000 69,060,000 204,529,000 207,887,000 Maintenance services and other 419,000 681,000 1,545,000 1,727,000 $ 392,734,000 $ 360,165,000 $ 1,164,097,000 $ 1,070,767,000 |
Earnings Per Common Share
Earnings Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Basic and diluted earnings per common share are computed by dividing net income by the weighted-average number of basic and diluted common shares outstanding, respectively. The weighted-average number of diluted common shares includes the impact of dilutive securities, including unvested, unexercised stock options and unvested restricted stock. The table below reconciles the weighted-average basic and diluted common shares outstanding: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average number of common shares outstanding - basic 72,839,000 72,009,000 72,718,000 71,714,000 Effect of dilutive securities (1) 753,000 682,000 717,000 667,000 Weighted average number of common shares outstanding - diluted 73,592,000 72,691,000 73,435,000 72,381,000 (1) Certain outstanding stock option awards are anti-dilutive and were therefore excluded from the calculation of the weighted average number of diluted common shares outstanding. During the three and nine months ended September 30, 2016 , options to purchase 501,000 and 544,000 shares having a weighted average exercise price of $34.14 were excluded. During the three and nine months ended September 30, 2015 , options to purchase 597,000 and 925,000 shares having weighted average exercise prices of $30.03 and $29.33 , respectively, were excluded. |
Other Contingencies
Other Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Contingencies | Other Contingencies Line of Credit We have a $200,000,000 bank line of credit on which we may draw to meet short-term liquidity requirements. Amounts drawn under the line of credit are payable upon demand. At September 30, 2016 , there were no borrowings under the line of credit. At September 30, 2016 , we also had outstanding a $78,078,000 irrevocable standby letter of credit, which relates to payment obligations under our insurance programs. In connection with the issuance of the letter of credit, the amount available under the line of credit was reduced by $78,078,000 at September 30, 2016 . The letter of credit was decreased to $63,735,000 on October 25, 2016. The line of credit requires us to satisfy one financial covenant. We are in compliance with our financial covenant at September 30, 2016 and expect to remain in compliance with such financial covenant. The line of credit expires on December 18, 2018 . Tax Jurisdictions and Matters We provide our services in 48 states and are subject to numerous local taxing jurisdictions within those states. In the ordinary course of business, a jurisdiction may contest our reporting positions with respect to the application of its tax code to our services. A jurisdiction’s conflicting position on the taxability of our services could result in additional tax liabilities. We have tax matters with various taxing authorities. Because of the uncertainties related to both the probable outcomes and amount of probable assessments due, we are unable to make a reasonable estimate of a liability. We do not expect the resolution of any of these matters, taken individually or in the aggregate, to have a material adverse effect on our consolidated financial position or results of operations based on our best estimate of the outcomes of such matters. Legal Proceedings We are subject to various claims and legal actions in the ordinary course of business. Some of these matters include payroll and employee-related matters and examinations by governmental agencies. As we become aware of such claims and legal actions, we record accruals for any exposures that are probable and estimable. If an adverse outcome of such claims and legal actions is reasonably possible, we assess materiality and provide such financial disclosure, as appropriate. The Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding or governmental examination that would have a material adverse effect on the Company’s consolidated financial condition or liquidity. Government Regulations Our clients are concentrated in the health care industry and are primarily providers of long-term care. Many of our clients’ revenues are highly reliant on Medicare, Medicaid and third party payors’ reimbursement funding rates. New legislation or additional changes in existing regulations could be made which could directly impact the governmental reimbursement programs in which our clients participate. As a result, we may not know the full effects of such programs until these laws are fully implemented and government agencies issue applicable regulations or guidance. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We evaluated all subsequent events through the filing date of this Form 10-Q. We believe there were no events or transactions occurring during this subsequent reporting period which require recognition or additional disclosure in these financial statements. |
Description of Business and S20
Description of Business and Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations | Healthcare Services Group, Inc. (the “Company”) provides management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of the health care industry, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. Although we do not directly participate in any government reimbursement programs, our clients’ reimbursements are subject to government regulation. Therefore, they are directly affected by any legislation relating to Medicare and Medicaid reimbursement programs. We provide our services primarily pursuant to full service agreements with our clients. In such agreements, we are responsible for the day-to-day management of employees located at our clients’ facilities. We also provide services on the basis of management-only agreements for a limited number of clients. Our agreements with clients typically provide for renewable one year service terms, cancelable by either party upon 30 to 90 days notice after the initial 60 to 120 day period. We are organized into two reportable segments: housekeeping, laundry, linen and other services (“Housekeeping”), and dietary department services (“Dietary”). Housekeeping consists of the managing of clients’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of patient rooms and common areas of a client’s facility, as well as the laundering and processing of the personal clothing belonging to the facility’s patients. Also within the scope of this segment’s service is the responsibility for laundering and processing of bed linens, uniforms and other assorted linen items utilized by a client facility. Dietary consists of managing clients’ dietary department which is principally responsible for food purchasing, meal preparation and providing dietitian consulting professional services, which includes the development of a menu that meets patients’ dietary needs. |
Unaudited Interim Financial Data | The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, these consolidated financial statements do not include all of the information and footnotes necessary for a complete presentation of financial position, results of operations and cash flows. However, in our opinion, all adjustments which are of a normal recurring nature and necessary for a fair presentation have been reflected in these consolidated financial statements. The balance sheet shown in this report as of December 31, 2015 has been derived from, and does not include, all of the disclosures contained in the financial statements for the year ended December 31, 2015 . These financial statements should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015 . The results of operations for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for any future period. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of Healthcare Services Group, Inc. and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and cash equivalents are held in U.S. financial institutions or in custodial accounts with U.S. financial institutions. Cash equivalents are defined as short-term, highly liquid investments with a maturity of three months or less at the time of purchase that are readily convertible into cash and have insignificant interest rate risk. |
Inventories and Supplies | Inventories and supplies include housekeeping, linen and laundry supplies, as well as food provisions and supplies. Inventories and supplies are stated at cost to approximate a first-in, first-out (FIFO) basis. Linen supplies are amortized on a straight-line basis over their estimated useful life of 24 months. |
Revenue Recognition | Revenues from our service agreements with clients are recognized as services are performed. As a distributor of laundry equipment, we occasionally sell laundry installations to certain clients. The sales in most cases represent the construction and installation of a turn-key operation and have payment terms ranging from 24 to 60 months. |
Income Taxes | We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current period. We accrue for probable tax obligations as required by facts and circumstances in various regulatory environments. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the book and tax bases of assets and liabilities. When appropriate, valuation allowances are recorded to reduce deferred tax assets to amounts for which realization is more likely than not. Uncertain income tax positions taken or expected to be taken in tax returns are reflected within our financial statements based on a recognition and measurement process. |
Earnings per Common Share | Basic earnings per common share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share are calculated using the weighted-average number of common shares outstanding and dilutive common shares, such as those issuable upon exercise of stock options. |
Share-Based Compensation | The Company recognizes compensation expense for share-based awards and programs for employees and directors. We estimate the fair value of stock options as of the date of grant using a Black-Scholes option valuation model, while share-based awards are valued based on the market-price on the date of grant. The value of the portion of the award that is ultimately expected to vest, after accounting for forfeitures, is recognized as an expense in the Company’s consolidated statements of comprehensive income ratably over the requisite service periods. |
Use of Estimates in Financial Statements | In preparing financial statements in conformity with U.S. GAAP, we make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Significant estimates are used in determining, but are not limited to, our allowance for doubtful accounts, accrued insurance claims, asset valuations, deferred taxes and reviews for potential impairment. The estimates are based upon various factors including current and historical trends, as well as other pertinent industry and regulatory authority information. We regularly evaluate this information to determine if it is necessary to update the basis for our estimates and to adjust for known changes. |
Self-Funded Captive Insurance Programs | In 2015, the Company transitioned its workers compensation and certain employee health & welfare insurance programs to HCSG Insurance Corp. (“HCSG Insurance”), its wholly owned captive insurance subsidiary which previously provided only general liability coverage to the Company. HCSG Insurance was formed to provide the Company with greater efficiency in managing its property & casualty and health & welfare programs. |
Concentrations of Credit Risk | Our financial instruments consist principally of cash and cash equivalents, marketable securities, deferred compensation funding and accounts and notes receivable. Our marketable securities are fixed income investments which are highly liquid and can be readily purchased or sold through established markets. At September 30, 2016 and December 31, 2015 , substantially all of our cash and cash equivalents and marketable securities were held in one large financial institution located in the United States. Our clients are concentrated in the health care industry and are primarily providers of long-term care. Many of our clients’ revenues are highly reliant on Medicare, Medicaid and third party payors’ reimbursement funding rates. 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 the liquidity of our clients, resulting in their inability to make payments to us in accordance with agreed upon payment terms. These factors could result in the recognition of significant additional bad debts in the future. |
Recent Accounting Pronouncements | In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments . The update replaces the current incurred loss impairment methodology of recognizing credit losses with a methodology that instead reflects expected credit losses and requires consideration of a broader range of information to inform credit loss estimates. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, with early adoption permitted for fiscal years and interim periods beginning after December 15, 2018. The Company is in the process of evaluating the impact of the adoption of this ASU. In March 2016, the FASB issued ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 is intended to simplify several aspects of the accounting for share-based payments. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within that year. The Company is in the process of evaluating the impact of the adoption of this ASU. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , and a subsequent amendment to the standard in March 2016 with ASU 2016-08. The original standard provides guidance on recognizing revenue, including a five step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendment to the standard clarifies implementation guidance on principal versus agent considerations. Adoption of the new standard is effective for reporting periods beginning after December 15, 2017, with early adoption prohibited. The Company is in the process of evaluating the impact of the adoption of this ASU. In February 2016, the FASB issued ASU 2016-02, Leases . ASU 2016-02 requires lessees to recognize assets and liabilities on their balance sheet related to the rights and obligations created by most leases, while continuing to recognize expenses on their income statements over the lease term. It will also require disclosures designed to give financial statement users information regarding the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is currently evaluating the impact ASU 2016-02 will have on our consolidated financial statements and associated disclosures. Balance Sheet Classification of Deferred Taxes . The amendment in this ASU requires that deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent in a classified statement of financial position. The guidance becomes effective for annual reporting periods beginning after December 15, 2016 with early adoption permitted. Management elected to adopt the standard in the first quarter of 2016, with retrospective application to prior period balances presented. The adoption of ASU 2015-17 did not have a material impact on the Company’s consolidated financial statements. |
Changes in Accumulated Other 21
Changes in Accumulated Other Comprehensive Income by Component (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table provides a summary of the changes in accumulated other comprehensive income for the nine months ended September 30, 2016 and 2015 : Unrealized Gains and Losses on Available for Sale Securities (1) Nine Months Ended September 30, 2016 2015 Accumulated other comprehensive income — beginning balance $ 543,000 $ 25,000 Other comprehensive income before reclassifications 914,000 184,000 Amounts reclassified from accumulated other comprehensive income (2)(3) (149,000 ) (3,000 ) Net current period change in other comprehensive income 765,000 181,000 Accumulated other comprehensive income — ending balance $ 1,308,000 $ 206,000 (1) All amounts are net of tax. (2) Realized gains and losses are recorded pre-tax under “Other income - Investment and interest” on our consolidated statements of comprehensive income. (3) For the nine months ended September 30, 2016 and 2015 , the Company recorded $226,000 and $5,000 , respectively, of realized gains from the sale of available for sale securities. Refer to Note 5 herein for further information. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | The following table sets forth the amounts of property and equipment by each class of depreciable assets as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 Housekeeping and office equipment and furniture $ 31,763,000 $ 29,852,000 Laundry and linen equipment installations 1,201,000 1,117,000 Autos and trucks 138,000 138,000 Total property and equipment, at cost 33,102,000 31,107,000 Less accumulated depreciation 19,827,000 18,021,000 Total property and equipment, net $ 13,275,000 $ 13,086,000 |
Goodwill and Other Intangible23
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Identifiable Intangible Assets Subject To Amortization | The following table sets forth the amounts of our identifiable intangible assets subject to amortization: September 30, 2016 December 31, 2015 Customer relationships $ 29,081,000 $ 35,781,000 Non-compete agreements — 800,000 Total other intangibles, gross 29,081,000 36,581,000 Less accumulated amortization 14,065,000 19,473,000 Other intangibles, net $ 15,016,000 $ 17,108,000 |
Estimated Amortization Expense For Intangibles Subject To Amortization | The following table sets forth the estimated amortization expense for intangibles subject to amortization for the remainder of 2016 , the following five fiscal years and thereafter: Period/Year Total Amortization Expense October 1 to December 31, 2016 $ 607,000 2017 $ 2,427,000 2018 $ 2,328,000 2019 $ 2,130,000 2020 $ 2,130,000 2021 $ 2,130,000 Thereafter $ 3,264,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The following tables provide details of our financial assets measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 and the basis for those measurements: As of September 30, 2016 Fair Value Measurement Using: Carrying Amount Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets: Marketable securities Municipal bonds — available for sale $ 80,623,000 $ 80,623,000 $ — $ 80,623,000 $ — Deferred compensation fund Money Market (1) $ 5,791,000 $ 5,791,000 $ — $ — $ — Balanced and Lifestyle 6,821,000 6,821,000 6,821,000 — — Large Cap Growth 5,636,000 5,636,000 5,636,000 — — Small Cap Growth 2,723,000 2,723,000 2,723,000 — — Fixed Income 2,780,000 2,780,000 2,780,000 — — International 1,183,000 1,183,000 1,183,000 — — Mid Cap Growth 1,398,000 1,398,000 1,398,000 — — Deferred compensation fund $ 26,332,000 $ 26,332,000 $ 20,541,000 $ — $ — As of December 31, 2015 Fair Value Measurement Using: Carrying Amount Total Fair Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Financial Assets: Marketable securities Municipal bonds — available for sale $ 69,496,000 $ 69,496,000 $ — $ 69,496,000 $ — Deferred compensation fund Money Market (1) $ 3,896,000 $ 3,896,000 $ — $ — $ — Balanced and Lifestyle 9,136,000 9,136,000 9,136,000 — — Large Cap Growth 5,218,000 5,218,000 5,218,000 — — Small Cap Growth 2,275,000 2,275,000 2,275,000 — — Fixed Income 2,624,000 2,624,000 2,624,000 — — International 1,025,000 1,025,000 1,025,000 — — Mid Cap Growth 1,217,000 1,217,000 1,217,000 — — Deferred compensation fund $ 25,391,000 $ 25,391,000 $ 21,495,000 $ — $ — (1) The fair value of the money market fund is based on the net asset value (“NAV”) of the shares held by the plan at the end of the period. The money market fund includes short-term United States dollar denominated money market instruments and the NAV is determined by the custodian of the fund. The money market fund can be redeemed at its NAV at the measurement date as there are no significant restrictions on the ability to sell this investment. |
Marketable Debt Securities | Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Other-than-temporary Impairments September 30, 2016 Type of security: Municipal bonds — available for sale $ 78,482,000 $ 2,175,000 $ (34,000 ) $ 80,623,000 $ — Total debt securities $ 78,482,000 $ 2,175,000 $ (34,000 ) $ 80,623,000 $ — December 31, 2015 Type of security: Municipal bonds — available for sale $ 68,640,000 $ 869,000 $ (13,000 ) $ 69,496,000 $ — Total debt securities $ 68,640,000 $ 869,000 $ (13,000 ) $ 69,496,000 $ — |
Contractual Maturities Of Available For Sale Investments | The following table summarizes the contractual maturities of debt securities held at September 30, 2016 and December 31, 2015 , which are classified as marketable securities in the Consolidated Balance Sheet. Municipal Bonds — Available for Sale Contractual maturity: September 30, 2016 December 31, 2015 Maturing in one year or less $ 2,587,000 $ 774,000 Maturing in second year through fifth year 18,411,000 13,852,000 Maturing in sixth year through tenth year 40,748,000 36,273,000 Maturing after ten years 18,877,000 18,597,000 Total debt securities $ 80,623,000 $ 69,496,000 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-based Compensation Expense | A summary of stock-based compensation expense for the nine months ended September 30, 2016 and 2015 is as follows: Nine Months Ended September 30, 2016 2015 Stock options $ 2,399,000 $ 2,093,000 Restricted stock 412,000 187,000 Employee Stock Purchase Plan 302,000 287,000 Total pre-tax stock-based compensation expense charged against income (1) $ 3,113,000 $ 2,567,000 (1) Stock-based compensation expense is recorded in selling, general and administrative expense in our consolidated statements of comprehensive income. |
Summary of Other Information of Stock Option Plans | Other information pertaining to activity of our stock awards is as follows: Nine Months Ended September 30, 2016 2015 Total grant-date fair value of stock options and awards granted $ 5,203,000 $ 4,027,000 Total fair value of stock options and awards vested during period $ 3,092,000 $ 2,719,000 A summary of our stock options outstanding under the Plan as of December 31, 2015 and changes during the nine months ended September 30, 2016 is as follows: Stock Options Outstanding Number of Shares Weighted Average Exercise Price December 31, 2015 2,461,000 $ 22.16 Granted 569,000 $ 34.14 Cancelled (105,000 ) $ 29.60 Exercised (276,000 ) $ 20.41 September 30, 2016 2,649,000 $ 24.62 |
Summarized Information of Stock Options Outstanding | The following table summarizes other information about our stock options at September 30, 2016 : Stock Options Range of exercise prices $10.39 - $34.14 Outstanding: Weighted average remaining contractual life (years) 6.5 Aggregate intrinsic value $ 39,626,000 Exercisable: Number of shares 1,191,000 Weighted average remaining contractual life (years) 4.6 Aggregate intrinsic value $ 25,163,000 Exercised: Aggregate intrinsic value $ 4,581,000 |
Assumption For Fair Value of Options Granted | The fair value of stock option awards granted in 2016 and 2015 was estimated on the date of grant using the Black-Scholes option valuation model using the following assumptions: Nine Months Ended September 30, 2016 2015 Risk-free interest rate 2.0% 1.9% Weighted average expected life (years) 5.8 5.8 Expected volatility 26.0% 27.2% Dividend yield 2.0% 2.2% |
Schedule of Restricted Stock Outstanding Stock-based Compensation | A summary of our outstanding stock-based compensation as of December 31, 2015 and changes during the nine months ended September 30, 2016 is as follows: Shares Weighted Average Grant Date Fair Value December 31, 2015 40,000 $ 29.10 Granted 44,000 $ 34.14 Vested (9,000 ) $ 28.76 Forfeited (1,000 ) $ 34.14 September 30, 2016 74,000 $ 32.09 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The stock-based compensation expense associated the options granted in 2016 and 2015 under our ESPP was estimated on the date of grant using the Black-Scholes option valuation model using the following assumptions: Nine Months Ended September 30, 2016 2015 Risk-free interest rate 0.58% 0.18% Weighted average expected life (years) 1.0 1.0 Expected volatility 19.7% 19.2% Dividend yield 2.0% 2.2% |
Dividends (Tables)
Dividends (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of Dividends Payable | During the nine months ended September 30, 2016 , we paid regular quarterly cash dividends of approximately $39,849,000 as follows: Quarter Ended March 31, 2016 June 30, 2016 September 30, 2016 Cash dividend per common share $ 0.18125 $ 0.18250 $ 0.18375 Total cash dividends paid $ 13,158,000 $ 13,293,000 $ 13,398,000 Record date February 19, 2016 May 20, 2016 August 19, 2016 Payment date March 25, 2016 June 24, 2016 September 23, 2016 |
Schedule of Dividends Payable on Outstanding Weighted Average Number of Basic Common Shares | Cash dividends declared on our outstanding weighted average number of basic common shares for the periods presented were approximately as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Cash dividends per common share $ 0.19 $ 0.18 $ 0.55 $ 0.53 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Information of Reportable Segments | Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenues Housekeeping services $ 239,584,000 $ 227,760,000 $ 716,154,000 $ 681,306,000 Dietary services 153,150,000 132,405,000 447,943,000 389,461,000 Total $ 392,734,000 $ 360,165,000 $ 1,164,097,000 $ 1,070,767,000 Income before income taxes Housekeeping services $ 23,645,000 $ 21,770,000 $ 68,966,000 $ 64,139,000 Dietary services 7,884,000 8,239,000 26,103,000 25,008,000 Corporate and eliminations (1) (958,000 ) (3,268,000 ) (5,211,000 ) (11,095,000 ) Total $ 30,571,000 $ 26,741,000 $ 89,858,000 $ 78,052,000 (1) Primarily represents corporate office costs and related overhead, recording of certain inventories and supplies and workers compensation costs at the reportable segment level which use accounting methods that differ from those used at the corporate level, as well as consolidated subsidiaries’ operating expenses that are not allocated to the reportable segments, net of investment and interest income. |
Revenues by Client Services | We earned total revenues from clients in the following service categories: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Housekeeping services $ 171,802,000 $ 158,019,000 $ 510,080,000 $ 471,692,000 Dietary services 153,150,000 132,405,000 447,943,000 389,461,000 Laundry and linen services 67,363,000 69,060,000 204,529,000 207,887,000 Maintenance services and other 419,000 681,000 1,545,000 1,727,000 $ 392,734,000 $ 360,165,000 $ 1,164,097,000 $ 1,070,767,000 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The table below reconciles the weighted-average basic and diluted common shares outstanding: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Weighted average number of common shares outstanding - basic 72,839,000 72,009,000 72,718,000 71,714,000 Effect of dilutive securities (1) 753,000 682,000 717,000 667,000 Weighted average number of common shares outstanding - diluted 73,592,000 72,691,000 73,435,000 72,381,000 (1) Certain outstanding stock option awards are anti-dilutive and were therefore excluded from the calculation of the weighted average number of diluted common shares outstanding. During the three and nine months ended September 30, 2016 , options to purchase 501,000 and 544,000 shares having a weighted average exercise price of $34.14 were excluded. During the three and nine months ended September 30, 2015 , options to purchase 597,000 and 925,000 shares having weighted average exercise prices of $30.03 and $29.33 , respectively, were excluded. |
Description of Business and S29
Description of Business and Significant Accounting Policies (Details) | 9 Months Ended | |
Sep. 30, 2016financial_institutionsegment | Dec. 31, 2015financial_institution | |
Schedule of Accounting Policies [Line Items] | ||
Service term | 1 year | |
Number of reportable segments | segment | 2 | |
Amortization period of inventories and supplies | 24 months | |
Number of financial institutions holding cash and cash equivalents and marketable securities | financial_institution | 1 | 1 |
Minimum | ||
Schedule of Accounting Policies [Line Items] | ||
Days to notify cancellation of service | 30 days | |
Initial period of service term | 60 days | |
Property and equipment payment terms | 24 months | |
Maximum | ||
Schedule of Accounting Policies [Line Items] | ||
Days to notify cancellation of service | 90 days | |
Initial period of service term | 120 days | |
Property and equipment payment terms | 60 months |
Changes in Accumulated Other 30
Changes in Accumulated Other Comprehensive Income by Component (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated other comprehensive income | ||
Balance | $ 296,456 | |
Balance | 331,104 | |
Accumulated Other Comprehensive Income, net of taxes | ||
Accumulated other comprehensive income | ||
Balance | 543 | $ 25 |
Other comprehensive income before reclassifications | 914 | 184 |
Amounts reclassified from accumulated other comprehensive income | (149) | (3) |
Net current period change in other comprehensive income | 765 | 181 |
Balance | $ 1,308 | $ 206 |
Changes in Accumulated Other 31
Changes in Accumulated Other Comprehensive Income by Component - Additional Information (Details) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Realized gains from the sale of available for sale securities | $ 226 | $ 5 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment, at cost | $ 33,102 | $ 33,102 | $ 31,107 | ||
Less accumulated depreciation | 19,827 | 19,827 | 18,021 | ||
Property and equipment, net | 13,275 | 13,275 | 13,086 | ||
Depreciation | 1,114 | $ 1,036 | 3,541 | $ 3,247 | |
Housekeeping and office equipment and furniture | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment, at cost | 31,763 | 31,763 | 29,852 | ||
Laundry and linen equipment installations | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment, at cost | 1,201 | 1,201 | 1,117 | ||
Autos and trucks | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment, at cost | $ 138 | $ 138 | $ 138 |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||||
Goodwill | $ 44,438 | $ 44,438 | $ 44,438 | ||
Amortization expense | 607 | $ 811 | $ 2,092 | $ 2,431 | |
Customer Relationships | |||||
Goodwill [Line Items] | |||||
Weighted-average amortization period of finite-lived intangible assets | 9 years | ||||
Housekeeping Segment | |||||
Goodwill [Line Items] | |||||
Goodwill | 42,377 | $ 42,377 | 42,377 | ||
Dietary Segment | |||||
Goodwill [Line Items] | |||||
Goodwill | $ 2,061 | $ 2,061 | $ 2,061 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets - Identifiable Intangible Assets Subject To Amortization (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangibles, gross | $ 29,081 | $ 36,581 |
Less accumulated amortization | 14,065 | 19,473 |
Other intangibles, net | 15,016 | 17,108 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangibles, gross | 29,081 | 35,781 |
Non-compete Agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total other intangibles, gross | $ 0 | $ 800 |
Goodwill and Other Intangible35
Goodwill and Other Intangible Assets - Estimated Amortization Expense For Intangibles Subject To Amortization (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
October 1 to December 31, 2016 | $ 607 |
2,017 | 2,427 |
2,018 | 2,328 |
2,019 | 2,130 |
2,020 | 2,130 |
2,021 | 2,130 |
Thereafter | $ 3,264 |
Fair Value Measurements - Marke
Fair Value Measurements - Marketable Securities and Deferred Compensation Fund Investment Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 80,623 | $ 69,496 |
Deferred compensation fund | 26,332 | 25,391 |
Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 20,541 | 21,495 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 26,332 | 25,391 |
Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 26,332 | 25,391 |
Municipal bonds — available for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 80,623 | 69,496 |
Municipal bonds — available for sale | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Municipal bonds — available for sale | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 80,623 | 69,496 |
Municipal bonds — available for sale | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Municipal bonds — available for sale | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 80,623 | 69,496 |
Municipal bonds — available for sale | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 80,623 | 69,496 |
Money Market | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Money Market | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Money Market | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Money Market | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 5,791 | 3,896 |
Money Market | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 5,791 | 3,896 |
Balanced and Lifestyle | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 6,821 | 9,136 |
Balanced and Lifestyle | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Balanced and Lifestyle | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Balanced and Lifestyle | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 6,821 | 9,136 |
Balanced and Lifestyle | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 6,821 | 9,136 |
Large Cap Growth | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 5,636 | 5,218 |
Large Cap Growth | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Large Cap Growth | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Large Cap Growth | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 5,636 | 5,218 |
Large Cap Growth | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 5,636 | 5,218 |
Small Cap Growth | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 2,723 | 2,275 |
Small Cap Growth | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Small Cap Growth | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Small Cap Growth | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 2,723 | 2,275 |
Small Cap Growth | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 2,723 | 2,275 |
Fixed Income | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 2,780 | 2,624 |
Fixed Income | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Fixed Income | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Fixed Income | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 2,780 | 2,624 |
Fixed Income | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 2,780 | 2,624 |
International | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 1,183 | 1,025 |
International | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
International | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
International | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 1,183 | 1,025 |
International | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 1,183 | 1,025 |
Mid Cap Growth | Quoted Prices in Active Markets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 1,398 | 1,217 |
Mid Cap Growth | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Mid Cap Growth | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 0 | 0 |
Mid Cap Growth | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | 1,398 | 1,217 |
Mid Cap Growth | Total Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation fund | $ 1,398 | $ 1,217 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | ||||
Unrealized gain (loss) on available for sale marketable securities, net of taxes | $ (369) | $ 198 | $ 765 | $ 181 |
Proceeds from available for sale municipal bonds | 2,983 | 1,858 | 8,137 | 4,404 |
Realized gain on other income, investment and interest | $ (17) | $ 2 | $ 226 | $ 5 |
Fair Value Measurements - Mar38
Fair Value Measurements - Marketable Debt Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amortized Cost | $ 78,482 | $ 68,640 |
Gross Unrealized Gains | 2,175 | 869 |
Gross Unrealized Losses | (34) | (13) |
Estimated Fair Value | 80,623 | 69,496 |
Other-than-temporary Impairments | 0 | 0 |
Municipal bonds — available for sale | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Amortized Cost | 78,482 | 68,640 |
Gross Unrealized Gains | 2,175 | 869 |
Gross Unrealized Losses | (34) | (13) |
Estimated Fair Value | 80,623 | 69,496 |
Other-than-temporary Impairments | $ 0 | $ 0 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities of Available For Sale Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | ||
Maturing in one year or less | $ 2,587 | $ 774 |
Maturing in second year through fifth year | 18,411 | 13,852 |
Maturing in sixth year through tenth year | 40,748 | 36,273 |
Maturing after ten years | 18,877 | 18,597 |
Total debt securities | $ 80,623 | $ 69,496 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total pre-tax stock-based compensation expense charged against income | $ 3,113 | $ 2,567 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total pre-tax stock-based compensation expense charged against income | 2,399 | 2,093 |
Restricted stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total pre-tax stock-based compensation expense charged against income | 412 | 187 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total pre-tax stock-based compensation expense charged against income | $ 302 | $ 287 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 9,447 | |
Period of expense of unrecognized compensation cost, years | 2 years 11 months 13 days | |
Common stock reserved for future issuance (in shares) | 3,931,000 | |
Shares available for future grant (in shares) | 1,282,000 | |
Maximum term of grants | 10 years | |
Options vested and exercisable, period | 5 years | |
Weighted average grant-date fair value of stock options granted (in dollars per share) | $ 7.46 | $ 6.64 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock granted (in shares) | 44,000 | 25,000 |
Weighted average grant date fair value of restricted stock granted (in dollars per share) | $ 34.14 | $ 30.30 |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for future grant (in shares) | 2,362,000 | |
Requisite service period for plan participation eligibility | 2 years | |
Stock options authorized to issue to employees (in shares) | 4,050,000 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Other Information of Stock Awards (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Total grant-date fair value of stock options and awards granted | $ 5,203 | $ 4,027 |
Total fair value of stock options and awards vested during period | $ 3,092 | $ 2,719 |
Share-Based Compensation - Su43
Share-Based Compensation - Summary of Stock Award Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Number of Shares | |
December 31, 2015 (in shares) | shares | 2,461 |
Granted (in shares) | shares | 569 |
Cancelled (in shares) | shares | (105) |
Exercised (in shares) | shares | (276) |
September 30, 2016 (in shares) | shares | 2,649 |
Weighted Average Exercise Price | |
December 31, 2015 (in dollars per share) | $ / shares | $ 22.16 |
Granted (in dollars per share) | $ / shares | 34.14 |
Cancelled (in dollars per share) | $ / shares | 29.60 |
Exercised (in dollars per share) | $ / shares | 20.41 |
September 30, 2016 (in dollars per share) | $ / shares | $ 24.62 |
Share-Based Compensation - Su44
Share-Based Compensation - Summarized Information About Stock Awards (Details) - $10.39 to $34.14 $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($)$ / sharesshares | |
Stock Options | |
Exercise price range - lower limit (in dollars per share) | $ / shares | $ 10.39 |
Exercise price range - upper limit (in dollars per share) | $ / shares | $ 34.14 |
Outstanding: | |
Weighted average remaining contractual life (years) | 6 years 6 months |
Aggregate intrinsic value | $ 39,626 |
Exercisable: | |
Number of shares (in shares) | shares | 1,191 |
Weighted average remaining contractual life (years) | 4 years 7 months |
Aggregate intrinsic value | $ 25,163 |
Exercised: | |
Aggregate intrinsic value of stock options exercised | $ 4,581 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumption For Fair Value of Options Granted (Details) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Risk-free interest rate | 2.00% | 1.90% |
Weighted average expected life in years | 5 years 9 months | 5 years 9 months 18 days |
Expected volatility | 26.00% | 27.20% |
Dividend yield | 2.00% | 2.20% |
Share-Based Compensation - Su46
Share-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Shares | ||
December 31, 2015 (in shares) | 40,000 | |
Granted (in shares) | 44,000 | 25,000 |
Vested (in shares) | (9,000) | |
Forfeited (in shares) | (1,000) | |
September 30, 2016 (in shares) | 74,000 | |
Weighted Average Grant Date Fair Value | ||
December 31, 2015 (in dollars per share) | $ 29.10 | |
Granted (in dollars per share) | 34.14 | $ 30.30 |
Vested (in dollars per share) | 28.76 | |
Forfeited (in dollars per share) | 34.14 | |
September 30, 2016 (in dollars per share) | $ 32.09 |
Share-Based Compensation - As47
Share-Based Compensation - Assumptions For Employee Stock Purchase Plan (Details) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.00% | 1.90% |
Weighted average expected life in years | 5 years 9 months | 5 years 9 months 18 days |
Expected volatility | 26.00% | 27.20% |
Dividend yield | 2.00% | 2.20% |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.58% | 0.18% |
Weighted average expected life in years | 1 year | 1 year |
Expected volatility | 19.70% | 19.20% |
Dividend yield | 2.00% | 2.20% |
Dividends - Schedule of Dividen
Dividends - Schedule of Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 11, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Equity [Abstract] | ||||||
Cash dividend paid per common share (in dollars per share) | $ 0.18375 | $ 0.18250 | $ 0.18125 | |||
Dividends paid | $ 13,398 | $ 13,293 | $ 13,158 | $ 39,849 | $ 38,338 | |
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Dividends declared (in dollars per share) | $ 0.185 |
Dividends - Cash Dividends per
Dividends - Cash Dividends per Common Share (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity [Abstract] | ||||
Cash dividends per common share (in dollars per share) | $ 0.19 | $ 0.18 | $ 0.55 | $ 0.53 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Forecast | |
Subsequent Event [Line Items] | |
Effective tax rate | 36.50% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Related Party Transactions [Abstract] | ||
Fees paid to related party firm (less than) | $ 120,000 | $ 120,000 |
Percentage of fee paid to related party in relation to related party's total revenue (less than) | 5.00% | 5.00% |
Segment Information - Schedule
Segment Information - Schedule of Information of Reportable Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 392,734 | $ 360,165 | $ 1,164,097 | $ 1,070,767 |
Income before income taxes | 30,571 | 26,741 | 89,858 | 78,052 |
Housekeeping Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 239,584 | 227,760 | 716,154 | 681,306 |
Dietary Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 153,150 | 132,405 | 447,943 | 389,461 |
Operating Segments | Housekeeping Services | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 23,645 | 21,770 | 68,966 | 64,139 |
Operating Segments | Dietary Services | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 7,884 | 8,239 | 26,103 | 25,008 |
Corporate and eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | $ (958) | $ (3,268) | $ (5,211) | $ (11,095) |
Segment Information - Revenues
Segment Information - Revenues by Client Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue from External Customer [Line Items] | ||||
Revenues | $ 392,734 | $ 360,165 | $ 1,164,097 | $ 1,070,767 |
Housekeeping Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 171,802 | 158,019 | 510,080 | 471,692 |
Dietary Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 153,150 | 132,405 | 447,943 | 389,461 |
Laundry and Linen Services | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | 67,363 | 69,060 | 204,529 | 207,887 |
Maintenance Services and Other | ||||
Revenue from External Customer [Line Items] | ||||
Revenues | $ 419 | $ 681 | $ 1,545 | $ 1,727 |
Earnings Per Common Share - Com
Earnings Per Common Share - Computation of Basic and Diluted Net Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Weighted average number of common shares outstanding - basic (in shares) | 72,839 | 72,009 | 72,718 | 71,714 |
Effect of dilutive securities (in shares) | 753 | 682 | 717 | 667 |
Weighted average number of common shares outstanding - diluted (in shares) | 73,592 | 72,691 | 73,435 | 72,381 |
Earnings Per Common Share - Add
Earnings Per Common Share - Additional Information (Details) - $ / shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Options outstanding to purchase common stock excluded from computation of diluted earnings per common share (in shares) | 501 | 597 | 544 | 925 |
Antidilutive securities excluded from earnings per share, average exercise price (in dollars per share) | $ 34.14 | $ 30.03 | $ 34.14 | $ 29.33 |
Other Contingencies (Details)
Other Contingencies (Details) | 9 Months Ended | |
Sep. 30, 2016USD ($)financial_covenantstate | Oct. 25, 2016USD ($) | |
Short-term Debt [Line Items] | ||
Bank line of credit | $ 200,000,000 | |
Borrowings under line of credit | 0 | |
Reduction of bank line of credit | $ 78,078,000 | |
Number of financial covenants | financial_covenant | 1 | |
Number of states in which entity operates | state | 48 | |
Standby Letter Of Credit | ||
Short-term Debt [Line Items] | ||
Irrevocable standby letter of credit, outstanding | $ 78,078,000 | |
Subsequent Event | Standby Letter Of Credit | ||
Short-term Debt [Line Items] | ||
Irrevocable standby letter of credit, outstanding | $ 63,735,000 |