Document And Entity Information
Document And Entity Information - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 21, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | HEALTHCARE SERVICES GROUP INC | ||
Entity Central Index Key | 731,012 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2,490 | ||
Entity Common Stock, Shares Outstanding | 73,679 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 9,557 | $ 23,853 |
Marketable securities, at fair value | 73,221 | 67,730 |
Accounts and notes receivable, less allowance for doubtful accounts of $11,985 and $6,911 as of December 31, 2017 and 2016, respectively | 378,720 | 271,276 |
Inventories and supplies | 42,393 | 37,800 |
Prepaid expenses and other assets | 23,515 | 13,965 |
Total current assets | 527,406 | 414,624 |
Property and equipment, net | 13,509 | 13,455 |
Goodwill | 51,084 | 44,438 |
Other intangible assets, less accumulated amortization of $12,853 and $14,672 as of December 31, 2017 and 2016, respectively | 30,881 | 14,409 |
Notes receivable — long-term portion | 15,476 | 7,531 |
Deferred compensation funding, at fair value | 28,885 | 24,119 |
Deferred income taxes | 7,498 | 9,822 |
Other noncurrent assets | 1,264 | 48 |
Total Assets | 676,003 | 528,446 |
Current liabilities: | ||
Accounts payable | 74,463 | 42,912 |
Accrued payroll, accrued and withheld payroll taxes | 32,139 | 22,303 |
Other accrued expenses | 4,561 | 4,397 |
Borrowings under line of credit | 35,382 | 0 |
Income taxes payable | 15,378 | 7,686 |
Accrued insurance claims | 22,245 | 23,573 |
Total current liabilities | 184,168 | 100,871 |
Accrued insurance claims — long-term portion | 62,454 | 64,080 |
Deferred compensation liability | 29,429 | 24,653 |
Commitments and contingencies | ||
STOCKHOLDERS’ EQUITY: | ||
Common Stock, $.01 par value; 100,000 shares authorized; 74,960 and 74,204 shares issued, and 73,436 and 72,601 shares outstanding as of December 31, 2017 and 2016, respectively | 750 | 742 |
Additional paid-in capital | 244,363 | 217,664 |
Retained earnings | 163,860 | 130,940 |
Accumulated other comprehensive income (loss), net of taxes | 837 | (319) |
Common Stock in treasury, at cost, 1,524 shares and 1,603 shares as of December 31, 2017 and 2016, respectively | (9,858) | (10,185) |
Total stockholders’ equity | 399,952 | 338,842 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 676,003 | $ 528,446 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Allowance for doubtful accounts | $ 11,985 | $ 6,911 |
Accumulated amortization of other intangible assets | $ 12,853 | $ 14,672 |
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) | 74,960,000 | 74,204,000 |
Common stock outstanding (in shares) | 73,436,000 | 72,601,000 |
Common stock in treasury (in shares) | 1,524,000 | 1,603,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Revenues | $ 1,866,131 | $ 1,562,662 | $ 1,436,849 |
Operating costs and expenses: | |||
Costs of services provided | 1,612,510 | 1,339,492 | 1,236,108 |
Selling, general and administrative | 126,732 | 105,417 | 111,689 |
Other income: | |||
Investment and interest | 6,076 | 2,634 | 712 |
Income before income taxes | 132,965 | 120,387 | 89,764 |
Income taxes | 44,739 | 42,991 | 31,740 |
Net income | $ 88,226 | $ 77,396 | $ 58,024 |
Per share data: | |||
Basic earnings per common share (in dollars per share) | $ 1.20 | $ 1.06 | $ 0.81 |
Diluted earnings per common share (in dollars per share) | $ 1.19 | $ 1.05 | $ 0.80 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 73,355 | 72,754 | 71,826 |
Diluted (in shares) | 74,348 | 73,474 | 72,512 |
Comprehensive income: | |||
Net income | $ 88,226 | $ 77,396 | $ 58,024 |
Other comprehensive income: | |||
Unrealized gain (loss) on available-for-sale marketable securities, net of taxes | 1,156 | (862) | 518 |
Total comprehensive income | $ 89,382 | $ 76,534 | $ 58,542 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Cash flows from operating activities: | ||||
Net income | $ 88,226 | $ 77,396 | $ 58,024 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 8,886 | 7,496 | 7,660 | |
Bad debt provision | 6,250 | 4,629 | 4,335 | |
Deferred income tax | 1,887 | 3,001 | 17,842 | |
Stock-based compensation expense, net of tax benefit from equity compensation plans(1) | [1] | 276 | 1,271 | 1,668 |
Amortization of premium on marketable securities | 1,296 | 1,723 | 681 | |
Unrealized (gain) loss on deferred compensation fund investments | (4,509) | (1,460) | 24 | |
Changes in operating assets and liabilities: | ||||
Accounts and notes receivable | (121,639) | (65,610) | (18,854) | |
Inventories and supplies | (1,873) | (1,492) | (846) | |
Prepaid expenses and other assets | (9,545) | (2,470) | (1,710) | |
Deferred compensation funding | (257) | 2,732 | (649) | |
Accounts payable and other accrued expenses | 11,197 | (4,251) | 2,403 | |
Accrued payroll, accrued and withheld payroll taxes | 11,927 | 6,307 | (28,314) | |
Accrued insurance claims | (2,954) | 5,404 | 13,987 | |
Deferred compensation liability | 5,061 | (731) | 1,113 | |
Income taxes payable | [1] | 13,401 | 7,455 | 5,997 |
Net cash provided by operating activities | 7,630 | 41,400 | 63,361 | |
Cash flows from investing activities: | ||||
Disposals of fixed assets | 338 | 275 | 267 | |
Additions to property and equipment | (5,397) | (5,442) | (4,998) | |
Purchases of marketable securities | (33,861) | (29,449) | (75,150) | |
Sales of marketable securities | 28,537 | 28,164 | 17,567 | |
Cash paid for acquisitions | (4,584) | 0 | 0 | |
Net cash used in investing activities | (14,967) | (6,452) | (62,314) | |
Cash flows from financing activities: | ||||
Dividends paid | (55,244) | (53,342) | (51,375) | |
Reissuance of treasury stock pursuant to Dividend Reinvestment Plan | 95 | 109 | 113 | |
Tax benefit from equity compensation plans | [1] | 0 | 2,981 | 1,873 |
Proceeds from the exercise of stock options | 12,808 | 5,968 | 6,251 | |
Net proceeds from short-term borrowings | 35,382 | 0 | 0 | |
Net cash used in financing activities | (6,959) | (44,284) | (43,138) | |
Net change in cash and cash equivalents | (14,296) | (9,336) | (42,091) | |
Cash and cash equivalents at beginning of the period | 23,853 | 33,189 | 75,280 | |
Cash and cash equivalents at end of the period | 9,557 | 23,853 | 33,189 | |
Supplementary cash flow information: | ||||
Cash paid for interest | 1,363 | 574 | 258 | |
Cash paid for income taxes, net of refunds | $ 35,367 | $ 32,532 | $ 7,901 | |
[1] | The Company adopted the provisions of ASU 2016-09 prospectively, and as such the amounts reflected for the years ended December 31, 2016 and 2015 have not been adjusted. |
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 (Loss), net of Taxes | Retained Earnings | Treasury Stock |
Balance (in shares) at Dec. 31, 2014 | 72,878 | |||||
Balance at Dec. 31, 2014 | $ 275,830 | $ 729 | $ 186,022 | $ 25 | $ 100,237 | $ (11,183) |
Comprehensive income: | ||||||
Net income for the period | 58,024 | 58,024 | ||||
Unrealized gain (loss) on available-for-sale marketable securities, net of taxes | 518 | 518 | ||||
Total comprehensive income | 58,542 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered for payment (in shares) | 386 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered for payment | 6,251 | $ 4 | 6,247 | |||
Tax benefit from equity compensation plans | 1,873 | 1,873 | ||||
Share-based compensation expense — stock options and restricted stock | 3,033 | 3,033 | ||||
Treasury shares issued for Deferred Compensation Plan funding and redemptions | 488 | 418 | 70 | |||
Shares issued pursuant to Employee Stock Plans | 1,701 | 1,363 | 338 | |||
Dividends paid | (51,375) | (51,375) | ||||
Shares issued pursuant to Dividend Reinvestment Plan | 113 | 343 | (230) | |||
Shares issued pursuant to acquisition (in shares) | 529 | |||||
Shares issued pursuant to acquisition | 0 | $ 5 | (5) | |||
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 | 77,396 | 77,396 | ||||
Unrealized gain (loss) on available-for-sale marketable securities, net of taxes | (862) | (862) | ||||
Total comprehensive income | 76,534 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered for payment (in shares) | 301 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered for payment | 5,968 | $ 3 | 5,965 | |||
Tax benefit from equity compensation plans | 2,773 | 2,773 | ||||
Share-based compensation expense — stock options and restricted stock | 3,743 | 3,743 | ||||
Treasury shares issued for Deferred Compensation Plan funding and redemptions | 534 | 103 | 431 | |||
Shares issued pursuant to Employee Stock Plans | 2,067 | 1,696 | 371 | |||
Dividends paid | (53,342) | (53,342) | ||||
Shares issued pursuant to Dividend Reinvestment Plan | 109 | 91 | 18 | |||
Shares issued pursuant to previous settlement (in shares) | 113 | |||||
Shares issued pursuant to previous settlement | 4,000 | $ 1 | 3,999 | |||
Other (in shares) | (3) | |||||
Other | 0 | |||||
Balance (in shares) at Dec. 31, 2016 | 74,204 | |||||
Balance at Dec. 31, 2016 | 338,842 | $ 742 | 217,664 | (319) | 130,940 | (10,185) |
Comprehensive income: | ||||||
Net income for the period | 88,226 | 88,226 | ||||
Unrealized gain (loss) on available-for-sale marketable securities, net of taxes | 1,156 | 1,156 | ||||
Total comprehensive income | 89,382 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered for payment (in shares) | 697 | |||||
Exercise of stock options and other stock-based compensation, net of shares tendered for payment | 12,808 | $ 7 | 12,801 | |||
Share-based compensation expense — stock options and restricted stock | 4,945 | 4,945 | ||||
Treasury shares issued for Deferred Compensation Plan funding and redemptions | 156 | 181 | (25) | |||
Shares issued pursuant to Employee Stock Plans | 2,091 | 1,752 | 339 | |||
Dividends paid | (55,306) | (55,306) | ||||
Shares issued pursuant to Dividend Reinvestment Plan | 95 | 82 | 13 | |||
Shares issued pursuant to acquisition (in shares) | 59 | |||||
Shares issued pursuant to acquisition | 6,939 | $ 1 | 6,938 | |||
Balance (in shares) at Dec. 31, 2017 | 74,960 | |||||
Balance at Dec. 31, 2017 | $ 399,952 | $ 750 | $ 244,363 | $ 837 | $ 163,860 | $ (9,858) |
Description of Business and Sig
Description of Business and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
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 healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. Although the Company does not directly participate in any government reimbursement programs, the Company’s clients receive government reimbursements related to Medicare and Medicaid. Therefore, they are directly affected by any legislation relating to Medicare and Medicaid reimbursement programs. The Company provides services primarily pursuant to full service agreements with its clients. In such agreements, the Company is responsible for the day-to-day management of employees located at the clients’ facilities. The Company also provides services on the basis of management-only agreements for a limited number of clients. The Company’s agreements with its clients typically provide for a one year service term, cancelable by either party upon 30 to 90 days’ notice, after the initial 60 to 120 day period. The Company is organized into two reportable segments; housekeeping, laundry, linen and other services (“Housekeeping”), and dietary department services (“Dietary”). Housekeeping consists of managing the clients’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of a client’s facility, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at a client facility. Dietary consists of managing the clients’ dietary departments which are principally responsible for food purchasing, meal preparation and dietitian professional services, which includes the development of menus that meet residents’ dietary needs. Use of Estimates in Financial Statements In preparing financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”), estimates and assumptions are made 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, the Company’s allowance for doubtful accounts, accrued insurance claims, 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. Management regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes. 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. Fair Value of Financial Instruments The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs (Levels 1 and 2) and minimize the use of unobservable inputs (Level 3) within the fair value hierarchy. Assets and liabilities are classified within the fair value hierarchy based on the lowest level (least observable) input that is significant to the measurement in its entirety. The Company’s financial instruments that are measured at fair value on a recurring basis consist of marketable securities and the deferred compensation fund investments. Other financial instruments such as cash and cash equivalents, accounts and notes receivable, accounts payable (including income taxes payable and accrued expenses) and borrowings under the Company’s line of credit are short-term in nature, and therefore the carrying value of these instruments are deemed to approximate their fair value. The Company has certain notes receivable that either do not bear interest or bear interest at a below-market rate. Therefore, such notes receivable of $6.9 million and $5.7 million at December 31, 2017 and 2016 , respectively, have been discounted to their present value and are reported at values of $6.8 million and $5.7 million at December 31, 2017 and 2016 , respectively. 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 and cash equivalents are defined as short-term, highly liquid investments with a maturity of three months or less at time of purchase that are readily convertible into cash and have insignificant interest rate risk. Investments in Marketable Securities Marketable securities are defined as fixed income investments which are highly liquid and can be readily purchased or sold through established markets. At December 31, 2017 , the Company had marketable securities of $73.2 million which were comprised primarily of tax exempt municipal bonds. These investments are accounted for as available-for-sale securities and are reported at fair value on the balance sheet. For the year ended December 31, 2017 , $1.1 million of unrealized gains related to these investments were recorded in other comprehensive income. Unrealized gains and losses are recorded net of income taxes. These assets are available for future needs under the Company’s self-insurance programs. The Company’s investment policy is intended to manage the assets to achieve the goals of preserving principal, maintaining adequate liquidity at all times, and maximizing returns subject to investment guidelines. The investment policy limits investment to certain types of instruments issued by institutions primarily with investment grade credit ratings and places restrictions on concentration by type and issuer. The Company periodically reviews the investments in marketable securities for other than temporary declines in fair value below the cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As of December 31, 2017 , Management believes that the recorded value of the Company’s investments in marketable securities was recoverable in all material respects. 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. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Additions, renewals and improvements are capitalized, while maintenance and repair costs are expensed when incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in income. Depreciation is recorded using the straight-line method over the following estimated useful lives: Housekeeping and Dietary equipment — 5 to 7 years; computer hardware and software — 3 to 7 years; and other, consisting of furniture and fixtures, leasehold improvements and vehicles — 5 to 10 years. Depreciation expense on property and equipment for the years ended December 31, 2017 , 2016 and 2015 was $5.0 million , $4.8 million and $4.4 million , respectively. Revenue Recognition Revenues from the Company’s service agreements with clients are recognized as services are performed. Revenues are reported net of sales taxes that are collected from customers and remitted to taxing authorities. Income Taxes The Company uses 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 year. The Company accrues 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 financial reporting and tax basis 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. Deferred tax assets and liabilities are more fully described in Note 12. Uncertain income tax positions taken or expected to be taken in tax returns are reflected within the Company’s financial statements based on a recognition and measurement process. Earnings per Common Share Basic earnings per common share is 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 is calculated using the weighted-average number of common shares outstanding and dilutive common shares, such as those issuable upon exercise of stock options and upon the vesting of restricted stock and restricted stock units. Share-Based Compensation The Company estimates the fair value of share-based awards on the date of grant using the Black-Scholes valuation model for stock options and using the share price on the date of grant for restricted stock and restricted stock units. The value of the award is recognized ratably as an expense in the Company’s Consolidated Statements of Comprehensive Income over the requisite service periods, with adjustments made for forfeitures as they occur. Advertising Costs Advertising costs are expensed when incurred. Advertising costs were no t material for the years ended December 31, 2017 , 2016 and 2015 . Impairment of Long-Lived Assets The carrying amounts of long-lived assets are periodically reviewed to determine whether current events or circumstances warrant adjustment to such carrying amounts. Any impairment would be measured as the amount that the carrying value of such assets exceeds their fair value, primarily based on estimated undiscounted cash flows. Considerable management judgment is necessary to estimate the fair value of assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value, less cost to sell. Identifiable Intangible Assets and Goodwill Identifiable intangible assets are amortized on a straight-line basis over their respective lives. Goodwill represents the excess of cost over the fair value of net assets of acquired businesses. Management reviews the carrying value of goodwill at least annually during the fourth quarter of each year to assess for impairment, or more often if events or circumstances indicate that the carrying value may exceed its estimated fair value. No impairment loss was recognized on the Company’s intangible assets or goodwill for the years ended December 31, 2017 , 2016 or 2015 . Treasury Stock Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains or losses on the subsequent reissuance of shares are credited or charged to additional paid in capital. Reclassification Certain prior period amounts have been reclassified to conform to current year presentation. Concentrations of Credit Risk The Company’s financial instruments that are subject to concentrations of credit risk are cash and cash equivalents, marketable securities, deferred compensation funding and accounts and notes receivable. The Company’s marketable securities are fixed income investments which are highly liquid and can be readily purchased or sold using established markets. At December 31, 2017 and 2016 , substantially all of the Company’s cash and cash equivalents and marketable securities were held in one large financial institution located in the United States. The Company’s clients are concentrated in the healthcare industry, and are primarily providers of long-term care. The revenues of many of the Company’s clients are highly reliant on Medicare, Medicaid and third-party payors’ reimbursement funding rates. New legislation or changes in existing regulations could be made which could directly impact the governmental reimbursement programs in which the clients participate. As a result, the Company may not know the full effects of such programs until these laws are fully implemented and governmental agencies issue applicable regulations or guidance. Significant Clients For the year ended December 31, 2017 , the Company had several clients who individually contributed over 3%, with one client, a multi-state operator, contributing as high as 17.6% , of the Company’s total consolidated revenues. Although the Company expects to continue its relationships with these clients, there can be no assurance thereof. The loss, individually or in the aggregate, of such clients, or a significant reduction in the revenues the Company receives from such clients, could have a material adverse effect on the Company’s results of operations. In addition, if any of these clients change or alter current payments terms, it could increase the Company’s accounts receivables balance and have a material adverse effect on the Company’s cash flows. Recent Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 was intended to simplify several aspects of the accounting for share-based payments. The Company adopted the standard beginning January 1, 2017. The impact of adopting the standard included the recognition of excess tax benefits related to share-based payments as a component of income tax expense, as opposed to additional paid-in capital; an amendment to the calculation of diluted earnings per share to exclude windfall tax benefits from assumed proceeds when calculating diluted shares outstanding; as well as accounting for forfeitures of share-based awards as they occur, as opposed to reserving for estimated forfeitures. The most material impact of the adoption was a reduction to income tax expense in 2017 of $5.7 million . In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business . The guidance changes the definition of a business to assist entities in evaluating whether a set of transferred assets and activities constitutes a business under Topic 805. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company adopted the standard effective January 1, 2018. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which was subsequently amended and updated throughout 2015 and 2016. The standard provides guidance on revenue recognition, among other topics such as the accounting for compensation and costs to obtain a contract. 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. Adoption is required for reporting periods beginning after December 15, 2017, with early adoption prohibited. The Company adopted the standard beginning on January 1, 2018 utilizing the modified retrospective method. The Company has evaluated the impact of the adoption of the standard by reviewing the nature and terms of existing contracts under the provisions of the new guidance and designing operational and process updates required for ongoing compliance. Management does not expect this guidance to result in a material impact to the Company's accounting for the revenue earned related to its Housekeeping and Dietary department services and accordingly, does not expect to record an adjustment to its consolidated financial statements upon adoption of the standard. Management anticipates that the most significant impact of the new standard will relate to additional disclosure obligations. 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 will adopt the new guidance as of January 1, 2019. Management is continuing to evaluate the expected impact of the requirements, however it is expected that the primary impact will relate to the capitalization of operating leases of office space, vehicles and equipment. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income by Component | 12 Months Ended |
Dec. 31, 2017 | |
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 For the years ended December 31, 2017 , 2016 and 2015 , the Company’s other comprehensive income related to the unrealized gains and losses from the Company’s available-for-sale marketable securities. The following table provides a summary of changes in accumulated other comprehensive income, net of taxes: Unrealized Gains and (Losses) on Available-for Sale-Securities (1) 2017 2016 2015 (in thousands) Accumulated other comprehensive (loss) income — beginning balance $ (319 ) $ 543 $ 25 Other comprehensive income (loss) before reclassifications 1,149 (1,005 ) 535 Losses (gains) reclassified from other comprehensive income (2) 7 143 (17 ) Net current period other comprehensive income (loss) (3) 1,156 (862 ) 518 Accumulated other comprehensive income (loss) — ending balance $ 837 $ (319 ) $ 543 (1) All amounts are net of tax. (2) For the years ended December 31, 2017 and 2016 , the Company recorded less than $0.1 million and $0.2 million of realized losses from the sale of available-for-sale securities, respectively. For the year ended December 31, 2015 , the Company recorded less than $0.1 million of realized gains for the sale of available-for-sale securities. Refer to Note 5 herein for further information. (3) For the years ended December 31, 2017 and 2015, the changes in other comprehensive income were both net of tax expense of $ 0.3 million . For the year ended December 31, 2016, the changes in other comprehensive income were net of a tax benefit of $ 0.5 million . Amounts Reclassified from Accumulated Other Comprehensive Income 2017 2016 2015 For the Year Ended December 31, (in thousands) Losses (gains) from the sale of available-for-sale securities $ 11 $ 222 $ (27 ) Tax (benefit) expense (4 ) (79 ) 10 Net loss (gain) reclassified from accumulated other comprehensive income 7 $ 143 $ (17 ) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method and is recorded over the estimated useful life of each class of depreciable asset. 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 asset as of December 31, 2017 and December 31, 2016 : December 31, 2017 December 31, 2016 (in thousands) Housekeeping and Dietary equipment $ 22,349 $ 21,136 Computer hardware and software 12,665 11,750 Other (1) 990 1,133 Total property and equipment, at cost $ 36,004 $ 34,019 Less accumulated depreciation 22,495 20,564 Total property and equipment, net $ 13,509 $ 13,455 (1) Includes furniture and fixtures, leasehold improvements and autos and trucks. Depreciation expense for the years ended December 31, 2017 , 2016 and 2015 was $5.0 million , $4.8 million and $4.4 million , respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
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 net assets of acquired businesses. 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 14 - Segment Information, was approximately $42.4 million and $8.7 million for Housekeeping and Dietary, respectively, as of December 31, 2017 . At December 31, 2016 , goodwill by reportable operating segment was $42.4 million and $2.1 million for Housekeeping and Dietary, respectively. The increase in goodwill is related to the acquisition of certain Dietary-related assets during 2017 . Intangible Assets The Company’s intangible assets consist of customer relationships which were obtained through acquisitions and are recorded at their 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 9.9 years . The increase from the prior year is due to the acquisition of certain Dietary-related assets during 2017 . The following table sets forth the estimated amortization expense for intangibles subject to amortization for the next five years and thereafter: Period/Year Total Amortization Expense (in thousands) 2018 $ 4,364 2019 $ 4,165 2020 $ 4,165 2021 $ 4,165 2022 $ 4,165 Thereafter $ 9,859 Amortization expense for the years ended December 31, 2017 , 2016 and 2015 was $3.9 million , $2.7 million and $3.2 million , respectively. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s current assets and current liabilities are financial instruments and most of these items (other than marketable securities and inventories) are recorded at cost in the Consolidated Balance Sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature. The Company’s financial assets that are measured at fair value on a recurring basis are its marketable securities and deferred compensation funding. The recorded values of all of the financial instruments approximate their current fair values because of their nature, stated interest rates and respective maturity dates or durations. The Company’s marketable securities consist of tax-exempt municipal bonds, which are classified as available-for-sale and are reported at fair value. Unrealized gains and losses associated with these investments are included in other comprehensive income (net of tax) within the Consolidated Statements of Comprehensive Income. The fair value of these marketable securities is classified within Level 2 of the fair value hierarchy, as these securities are measured using quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable. Such valuations are determined by a third-party pricing service. For the years ended December 31, 2017 , 2016 and 2015 , the Company recorded unrealized gains of $1.2 million , unrealized losses of $0.9 million and unrealized gains of $0.5 million on marketable securities, respectively. For the years ended December 31, 2017 , 2016 and 2015 , the Company received total proceeds, less the amount of interest received, of $28.5 million , $28.1 million and $16.4 million , respectively, from sales of available-for-sale municipal bonds. For the years ended December 31, 2017 and 2016 , these sales resulted in realized losses of less than $0.1 million and $0.2 million , respectively. For the year ended December 31, 2015 , there were realized gains of less than $0.1 million . Such gains and losses were recorded in “Other income-Investment and interest” in the Consolidated Statements of Comprehensive Income. The basis for the sale of these securities was the specific identification of each bond sold during the period. 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 these investments are determined based on quoted market prices (Level 1). The following tables provide fair value measurement information for the Company’s marketable securities and deferred compensation fund investment assets as of December 31, 2017 and 2016 : As of December 31, 2017 Fair Value Measurement Using: Carrying Total Fair Quoted Significant Significant (in thousands) Financial Assets: Marketable securities Municipal bonds — available-for-sale $ 73,221 $ 73,221 $ — $ 73,221 $ — Deferred compensation fund Money Market (1) $ 2,720 $ 2,720 $ — $ 2,720 $ — Balanced and Lifestyle 8,523 8,523 8,523 — — Large Cap Growth 7,802 7,802 7,802 — — Small Cap Growth 3,442 3,442 3,442 — — Fixed Income 3,050 3,050 3,050 — — International 1,531 1,531 1,531 — — Mid Cap Growth 1,817 1,817 1,817 — — Deferred compensation fund $ 28,885 $ 28,885 $ 26,165 $ 2,720 $ — As of December 31, 2016 Fair Value Measurement Using: Carrying Total Fair Quoted Significant Significant (in thousands) Financial Assets: Marketable securities Municipal bonds — available-for-sale $ 67,730 $ 67,730 $ — $ 67,730 $ — Deferred compensation fund Money Market (1) $ 3,147 $ 3,147 $ — $ 3,147 $ — Balanced and Lifestyle 7,162 7,162 7,162 — — Large Cap Growth 5,583 5,583 5,583 — — Small Cap Value 2,933 2,933 2,933 — — Fixed Income 2,752 2,752 2,752 — — International 1,132 1,132 1,132 — — Mid Cap Growth 1,410 1,410 1,410 — — Deferred compensation fund $ 24,119 $ 24,119 $ 20,972 $ 3,147 $ — (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. Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Other-Than-Temporary Impairments (in thousands) December 31, 2017 Marketable securities Municipal bonds — available-for-sale $ 72,249 $ 1,169 $ (197 ) $ 73,221 $ — Total debt securities $ 72,249 $ 1,169 $ (197 ) $ 73,221 $ — December 31, 2016 Marketable securities Municipal bonds — available-for-sale $ 68,220 $ 178 $ (668 ) $ 67,730 $ — Total debt securities $ 68,220 $ 178 $ (668 ) $ 67,730 $ — December 31, 2015 Marketable securities Municipal bonds — available-for-sale $ 68,640 $ 869 $ (13 ) $ 69,496 $ — Total debt securities $ 68,640 $ 869 $ (13 ) $ 69,496 $ — The following table summarizes the contractual maturities of debt securities held at December 31, 2017 and 2016 , which are classified as marketable securities in the Consolidated Balance Sheets: Municipal Bonds — Available-for-Sale December 31, 2017 2016 (in thousands) Contractual maturity: Maturing in one year or less $ 916 $ 973 Maturing in second year through fifth year 15,948 28,671 Maturing in sixth year through tenth year 22,851 21,651 Maturing after ten years 33,506 16,435 Total debt securities $ 73,221 $ 67,730 |
Accounts and Notes Receivable
Accounts and Notes Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Accounts and Notes Receivable | Accounts and Notes Receivable Any decision to extend credit is made on a case-by-case basis and is based on a number of qualitative and quantitative factors related to the particular client, as well as the general risks associated with operating within the long-term care industry. The Company’s net accounts and notes receivable balance increased from December 31, 2016 . Fluctuations in net accounts and notes receivable are attributable to a variety of factors including, but not limited to, the timing of cash receipts from customers and the inception, transition or termination of client relationships. There are a variety of factors that impact the clients’ ability to pay in accordance with the Company’s agreements. Primary among these factors is the clients’ participation in programs funded by federal and state governmental agencies. Deviations in the timing or amounts of reimbursements under those programs can impact the clients’ cash flows and the timing of their payments. The payment terms in the Company’s service agreements are not contingent upon the clients’ cash flows and notwithstanding the Company’s efforts to minimize credit risk exposure, various factors affecting the clients’ cash flows could have an indirect, yet material adverse effect on the Company’s results of operations and financial condition. The Company deploys significant resources and has invested in tools and processes to optimize Management’s credit and collections efforts. When appropriate, the Company utilizes interest-bearing promissory notes as an alternative to accounts receivable to enhance the collectability of amounts due, by providing a definitive repayment plan and providing a means by which to further evidence the amounts owed. At December 31, 2017 and 2016 , the Company had $36.6 million and $19.2 million , net of reserves, respectively, of such promissory notes outstanding. In addition, the Company may assist clients who are adjusting to changes in their cash flows by amending the Company’s agreements from full-service to management-only arrangements, or by modifying contractual payment terms to accommodate clients who have in good faith established clearly-defined plans for addressing cash flow issues. These efforts are intended to minimize the Company’s collections risk while maintaining relationships with the clients. |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts is established as losses are estimated to have occurred through a provision for bad debts charged to cost of services provided in the Company’s Consolidated Statements of Comprehensive Income. The allowance for doubtful accounts is evaluated based on the Company’s ongoing review of accounts and notes receivable and is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The Company has had varying collections experience with respect to its accounts and notes receivable. The Company has sometimes extended the period of payment for certain clients beyond contractual terms. Such clients include those who have terminated service agreements and slow payers experiencing financial difficulties. In order to provide for these collection problems and the general risk associated with the granting of credit terms, the Company recorded the following bad debt provisions (in an Allowance for Doubtful Accounts): Year Ended December 31, 2017 2016 2015 (in thousands) Bad debt provision $ 6,250 $ 4,629 $ 4,335 As a percentage of total revenues, these provisions represent approximately 0.3% for each of the years ended December 31, 2017 , 2016 and 2015 . In making the Company’s credit evaluations, in addition to analyzing and anticipating, where possible, the specific cases described above, management considered the general collection risk associated with trends in the long-term care industry. The Company establishes credit limits, performs ongoing credit evaluations and monitors accounts to minimize the risk of loss. Despite the Company’s efforts to minimize credit risk exposure, clients could be adversely affected if future industry trends change in such a manner as to negatively impact their cash flows. If the Company’s clients experience a negative impact on their cash flows, it could have a material adverse effect on the Company’s results of operations and financial condition. Impaired Notes Receivable The Company evaluates its notes receivable for impairment quarterly and on an individual client basis. Notes receivable are generally evaluated for impairment when the respective clients are either in bankruptcy, are subject to collections activity or are slow payers that are experiencing financial difficulties. In the event that the evaluation results in a determination that a note receivable is impaired, it is valued at the present value of expected future cash flows or at the market value of related collateral. Summary schedules of impaired notes receivable, and the related reserve, for the years ended December 31, 2017 , 2016 and 2015 are as follows: Impaired Notes Receivable Year Ended December 31, Balance Beginning of Year Additions Deductions Balance End of Year Average Outstanding Balance (in thousands) 2017 $ 5,685 $ 1,169 $ — $ 6,854 $ 6,270 2016 $ 6,471 $ — $ 786 $ 5,685 $ 6,078 2015 $ 10,208 $ 395 $ 4,132 $ 6,471 $ 8,340 Reserve for Impaired Notes Receivable Year Ended December 31, Balance Beginning of Year Additions Deductions Balance End of Year (in thousands) 2017 $ 2,419 $ 465 $ — $ 2,884 2016 $ 2,139 $ 280 $ — $ 2,419 2015 $ 3,031 $ 99 $ 991 $ 2,139 For impaired notes receivable, interest income is recognized on a cost recovery basis only. As a result, no interest income was recognized on impaired notes receivable. The Company follows an income recognition policy on all other notes receivable that do not recognize interest income until cash payments are received. This policy was established, recognizing the environment of the long-term care industry, and not because such notes receivable are necessarily impaired. The difference between income recognition on a full accrual basis and cash basis, for notes receivable that are not considered impaired, is not material. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 31, 2017 | |
Leases, Operating [Abstract] | |
Lease Commitments | Lease Commitments The Company leases office facilities, equipment and vehicles under operating leases expiring on various dates through 2025 . Certain office leases contain renewal options. The following is a schedule by calendar year of future minimum lease payments under operating leases that have remaining terms as of December 31, 2017 : Period/Year Operating Leases (in thousands) 2018 $ 2,482 2019 1,968 2020 1,489 2021 734 2022 735 Thereafter 1,710 Total minimum lease payments $ 9,118 Total expense for all operating leases for the years ended December 31, 2017 , 2016 and 2015 was as follows: Year Ended December 31, 2017 2016 2015 (in thousands) Operating lease expense $ 3,833 $ 2,615 $ 2,003 |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation A summary of stock-based compensation expense and related tax benefits for the years ended December 31, 2017 , 2016 and 2015 is as follows: Year Ended December 31, 2017 2016 2015 (in thousands) Stock options $ 3,740 $ 3,193 $ 2,781 Restricted stock and restricted stock units 1,205 550 252 Employee Stock Purchase Plan 1,040 509 508 Total pre-tax stock-based compensation expense charged against income (1) $ 5,985 $ 4,252 $ 3,541 Total recognized tax benefit related to stock-based compensation $ 5,709 $ 2,773 $ 1,873 (1) Stock-based compensation expense is recorded in the selling, general and administrative caption in the Consolidated Statements of Comprehensive Income. At December 31, 2017 , the unrecognized compensation cost related to unvested stock options and awards was $11.4 million . The weighted average period over which these awards will vest is approximately 2.7 years. 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, restricted stock units 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 December 31, 2017 , 3.2 million shares of Common Stock were reserved for issuance under the Plan, including 0.8 million 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 individuals who will be granted stock awards, the number of stock awards each individual will receive and the terms of the grants in accordance with the Plan. Stock Options A summary of stock options outstanding under the Plan as of December 31, 2017 and changes during 2017 is as follows: Number of Shares Weighted Average Exercise Price (in thousands, except per share data) December 31, 2016 2,615 $ 24.61 Granted 544 $ 39.38 Exercised (682 ) $ 18.95 Forfeited (100 ) $ 34.10 Expired (3 ) $ 23.49 December 31, 2017 2,374 $ 29.22 The weighted average grant-date fair value of stock options granted during the years ended 2017 , 2016 and 2015 were $8.52 , $7.46 and $6.64 per common share, respectively. The total intrinsic value of options exercised during the years ended 2017 , 2016 and 2015 were $19.5 million , $4.9 million and $6.5 million , respectively. The tax benefit realized from stock options exercised during 2017 was $5.3 million . The fair value of the stock option awards granted during 2017 , 2016 and 2015 were estimated on the dates of grant using the Black-Scholes option valuation model and the following assumptions: Year Ended December 31, 2017 2016 2015 Risk-free interest rate 2.0 % 2.0 % 1.9 % Weighted average expected life 5.8 years 5.8 years 5.8 years Expected volatility 25.1 % 26.0 % 27.2 % Dividend yield 1.9 % 2.0 % 2.2 % The following table summarizes other information about the stock options at December 31, 2017 : December 31, 2017 (dollars in thousands, except per share data) Outstanding: Aggregate intrinsic value $ 55,789 Weighted average remaining contractual life 6.5 years Exercisable: Number of options 954 Weighted average exercise price $ 22.19 Aggregate intrinsic value $ 29,134 Weighted average remaining contractual life 4.7 years Restricted Stock A summary of the restricted stock outstanding under the Plan as of December 31, 2017 and changes during 2017 are as follows: Number of Restricted Shares Weighted Average Grant-Date Fair Value (in thousands, except per share data) December 31, 2016 74 $ 32.09 Granted — $ — Vested (17 ) $ 31.41 Forfeited — $ — December 31, 2017 57 $ 32.30 There were no grants of restricted stock during 2017 . The weighted average grant-date fair values and total fair values of restricted stock vested during 2017 , 2016 and 2015 are as follows: Year Ended December 31, 2017 2016 2015 (in thousands, except per share data) Weighted average grant-date fair value of restricted stock granted $ — $ 34.14 $ 30.30 Total fair value of restricted stock vested $ 690 $ 311 $ 123 Fair value is determined based on the market price of the shares on the date of grant. The weighted average remaining vesting period for the unvested restricted stock is 2.5 years . Restricted Stock Units For the year ended December 31, 2017 , the Company granted 0.1 million restricted stock units with a weighted average grant date fair value of $40.16 per unit. Fair value is determined based on the market price of the underlying shares on the date of grant. During 2016 and 2015 , there were no grants of restricted stock units. A summary of the outstanding restricted stock units as of December 31, 2017 and changes during 2017 is as follows: Number of Restricted Units Weighted Average Grant Date Fair Value (in thousands, except per share data) December 31, 2016 — $ — Granted 88 $ 40.16 Vested — $ — Forfeited — $ — December 31, 2017 88 $ 40.16 The weighted average remaining vesting period for the unvested restricted stock units is 4.1 years . Employee Stock Purchase Plan The Company's Employee Stock Purchase Plan ("ESPP") is currently available through 2021 to all eligible employees. All full-time and part-time employees who work an average of 20 hours per week and have completed two years of continuous service with the Company 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 4.1 million shares of Common Stock to its employees. Pursuant to such authorization, there are 2.3 million shares available for future grant at December 31, 2017 (after deducting the 2017 funding of the 54,000 shares delivered in 2018 ). Under the terms of the ESPP, participants may contribute through payroll deductions up to $21,250 ( 85% of IRS limitation) of their compensation toward the purchase of the Company’s Common Stock. No employee may purchase Common Stock which exceeds $25,000 in fair market value (determined on the option date) for each calendar year. The option price per share is equal to the lower of 85% of the fair market price on the first day of the offering period, or 85% of the fair market price on the last day of the offering period. The following table summarizes information about the Company’s ESPP annual offerings for the years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, 2017 2016 2015 (in thousands, except per share data) Common shares purchased 54 53 59 Per common share purchase price $ 33.29 $ 29.64 $ 26.29 Deferred Compensation Plan The Company offers a Supplemental Executive Retirement Plan (“SERP”) for certain key executives and employees. The SERP is not qualified under Section 401 of the Internal Revenue Code. The SERP allows participants to defer up to 25% of their earned income on a pre-tax basis and as of the last day of each plan year, each participant will be credited with a 25% match of up to 15% of their deferral in the form of Company Common Stock based on the then-current market value. SERP participants fully vest in the Company’s matching contribution three years from the first day of the initial year of participation. The income deferred and the matching contributions are unsecured and subject to the claims of the Company’s general creditors. Under the SERP, the Company is authorized to issue up to 1.0 million shares of Common Stock to its employees. Pursuant to such authorization, there are 0.4 million shares available for future grant at December 31, 2017 (after deducting the 2017 funding of 9,000 shares delivered in 2018 ). At the time of issuance, such shares were accounted for at cost as treasury stock. At December 31, 2017 , approximately 0.3 million of such shares are vested and remain in the respective active participants’ accounts with the trustee. The following table summarizes information about the SERP for the plan years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, 2017 2016 2015 (in thousands) SERP expense (1) $ 503 $ 511 $ 538 Treasury shares issued to fund SERP expense (2) 9 13 15 SERP trust account balance at December 31 (3) $ 42,467 $ 34,599 $ 37,765 Unrealized gain (loss) recorded in SERP liability account $ 4,534 $ 1,495 $ (62 ) (1) Both the SERP match and the deferrals are included in the selling, general and administrative caption in the Consolidated Statements of Comprehensive Income. (2) Shares related to the SERP match for each year are funded at the beginning of the subsequent year. (3) SERP trust account investments are recorded at their fair value which is based on quoted market prices. Differences between such amounts in the table above and the deferred compensation funding asset reported on the Consolidated Balance Sheets represent the value of Company Common Stock held in the Plan participants’ trust accounts and reported by the Company as treasury stock in the Consolidated Balance Sheets. |
Other Employee Benefit Plans
Other Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Other Employee Benefit Plans | Other Employee Benefit Plans Retirement Savings Plan Since October 1, 1999, the Company has had a retirement savings plan for eligible employees (the “RSP”) under Section 401(k) of the Internal Revenue Code. The RSP allows eligible employees to contribute up to 15% of their eligible compensation on a pre-tax basis. There is no match by the Company. |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Dividends | Dividends The Company has paid regular quarterly cash dividends since the second quarter of 2003. During 2017 , the Company paid regular quarterly cash dividends totaling $55.2 million as detailed below: Paid During the Quarter Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 (in thousands, except per share amounts) Cash dividends paid per common share $ 0.18625 $ 0.18750 $ 0.18875 $ 0.19000 Total cash dividends paid $ 13,624 $ 13,750 $ 13,883 $ 13,987 Record date February 17, 2017 May 19, 2017 August 18, 2017 November 17, 2017 Payment date March 24, 2017 June 23, 2017 September 22, 2017 December 22, 2017 Additionally, on January 30, 2018 , the Company’s Board of Directors declared a regular quarterly cash dividend of $0.19125 per common share, which will be paid on March 23, 2018 to shareholders of record as of the close of business on February 16, 2018 . Cash dividends declared on the Company’s outstanding weighted average number of basic common shares for the years ended December 31, 2017 , 2016 and 2015 were as follows: Year Ended December 31, 2017 2016 2015 Cash dividends declared per common share $ 0.75750 $ 0.73750 $ 0.71750 The Company’s Board of Directors review the dividend policy on a quarterly basis. Although there can be no assurance that the Company will continue to pay dividends or the amount of the dividends, the Company expects to continue to pay a regular quarterly cash dividend. In connection with the establishment of the Company’s dividend policy, the Company adopted a Dividend Reinvestment Plan in 2003. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table summarizes the provision for income taxes: Year Ended December 31, 2017 2016 2015 (in thousands) Current: Federal $ 35,673 $ 33,032 $ 11,917 State 7,179 6,958 2,173 42,852 39,990 14,090 Deferred: Federal 2,924 2,163 13,646 State (1,037 ) 838 4,004 1,887 3,001 17,650 Tax provision $ 44,739 $ 42,991 $ 31,740 Deferred income taxes are recorded using the asset and liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and income tax basis of assets and liabilities. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law, enacting significant changes to corporate tax rates, as well as business-related exclusions, deductions and credits. The primary impact to the Company was the decrease in the U.S. federal corporate income tax rate from 35% to 21%. Accordingly, during the fourth quarter 2017, the Company recognized the effects of the changes in the tax law and rates on its deferred tax balances. The net result of the remeasurement was an approximately $4.5 million decrease to the Company’s net deferred tax assets balance and a corresponding increase to the Company’s provision for income taxes. Significant components of the Company’s federal and state deferred tax asset and liability balances are as follows: Year Ended December 31, 2017 2016 (in thousands) Deferred tax assets: Allowance for doubtful accounts $ 3,109 $ 2,672 Deferred compensation 6,601 8,532 Accrued insurance claims 3,665 5,862 Non-deductible reserves 567 1,257 Amortization of intangibles 162 624 Other 662 858 14,766 19,805 Deferred tax liabilities: Expensing of housekeeping supplies (4,678 ) (6,752 ) Depreciation of property and equipment (1,745 ) (2,568 ) Other (845 ) (663 ) (7,268 ) (9,983 ) Net deferred tax assets $ 7,498 $ 9,822 Realization of the Company’s deferred tax assets is dependent upon future earnings in specific tax jurisdictions, the timing and amount of which are uncertain. Management assesses the Company’s income tax positions and records tax benefits for all years subject to examination based upon an evaluation of the facts, circumstances, and information available at the reporting dates, which include historical operating results and expectations of future earnings. As such, management believes it is more likely than not that the deferred tax assets recorded will be realized to reduce future income taxes and therefore no valuation allowances are necessary. The table below provides a reconciliation between the tax expense computed by applying the statutory federal income tax rate to income before income taxes and the provision for income taxes: Year Ended December 31, 2017 2016 2015 (in thousands) Income tax expense computed at statutory rate $ 46,538 $ 42,136 $ 31,418 Increases (decreases) resulting from: State income taxes, net of federal tax benefit 3,661 5,064 4,015 Federal jobs credits (4,193 ) (4,550 ) (3,900 ) Tax exempt interest (568 ) (457 ) (132 ) Other, net (699 ) 798 339 Income tax expense $ 44,739 $ 42,991 $ 31,740 The Company performs an evaluation each period of its tax positions taken and expected to be taken in tax returns. The evaluation is performed on positions relating to tax years that remain subject to examination by major tax jurisdictions, the earliest of which is the tax year ended December 31, 2012 . Based on the evaluation, the Company concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Therefore, the table reporting on the change in the liability for unrecognized tax benefits during the years ended December 31, 2017 and 2016 is omitted as there is no activity to report in such account for the years ended December 31, 2017 or 2016 , and there was no balance of unrecognized tax benefits at the beginning of 2016 . The Company may from time to time be assessed interest or penalties by taxing jurisdictions, although any such assessments historically have been minimal and immaterial to its financial results. When the Company has received an assessment for interest and/or penalties, it will be 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 | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |
Related Party Transactions | Related Party Transactions A director is a member of a law firm which was retained by the Company. During the years ended December 31, 2017 , 2016 and 2015 , fees paid by the Company to such firm did not exceed $120,000 in any period. Additionally, such fees did not exceed, in any period, 5% of such firm’s revenues or the Company’s revenues. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Reportable Operating Segments The Company manages and evaluates its operations in two reportable segments: Housekeeping (housekeeping, laundry, linen and other services) and Dietary (dietary department services). Although both segments serve the same client base and share many operational similarities, they are managed separately due to distinct differences in the type of services provided, as well as the specialized expertise required of the professional management personnel responsible for delivering each segment’s services. Such services are rendered pursuant to discrete 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 the information in the Consolidated Financial Statements relate primarily to corporate level transactions and recording of transactions at the reportable segment level using 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 in the Consolidated Financial Statements. In addition, most corporate expenses such as corporate salary and benefit costs, certain legal costs, information technology costs, depreciation, amortization of finite-lived intangible assets, share based compensation costs and other corporate-specific costs, are not allocated to the operating segments. There are also allocations for workers’ compensation and general liability expense within the operating segments that differ from the actual expense recorded by the Company under U.S. GAAP. Segment amounts disclosed are prior to elimination entries made in consolidation. All revenues and net income are earned in the United States. Year Ended December 31, 2017 2016 2015 (in thousands) Revenues (1) Housekeeping services $ 979,610 $ 957,148 $ 909,709 Dietary services 886,521 605,514 527,140 Corporate and eliminations — — — Consolidated $ 1,866,131 $ 1,562,662 $ 1,436,849 Income before income taxes Housekeeping services $ 95,505 $ 90,756 $ 84,471 Dietary services 46,008 34,641 31,612 Corporate and eliminations (2) (8,548 ) (5,010 ) (26,319 ) Consolidated $ 132,965 $ 120,387 $ 89,764 Depreciation and amortization Housekeeping services $ 6,547 $ 6,535 $ 6,488 Dietary services 1,813 439 685 Corporate and eliminations 526 522 487 Consolidated $ 8,886 $ 7,496 $ 7,660 Total assets Housekeeping services $ 304,303 $ 266,464 $ 228,116 Dietary services 242,874 127,187 104,797 Corporate and eliminations (3) 128,826 134,795 148,036 Consolidated $ 676,003 $ 528,446 $ 480,949 Capital expenditures Housekeeping services $ 4,287 $ 4,612 $ 3,586 Dietary services 663 410 336 Corporate and eliminations 447 420 1,076 Consolidated $ 5,397 $ 5,442 $ 4,998 (1) For the year ended December 31, 2017 , the Company earned revenue from one customer that amounted to more than 10% of total consolidated revenues. Housekeeping services and Dietary services both earned revenue from the customer, the total of which amounted to $327.5 million . (2) Represents primarily corporate office cost 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. (3) Primarily consists of cash and cash equivalents, marketable securities, deferred income taxes and other current and noncurrent assets. |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2017 | |
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 outstanding stock options and unvested restricted stock and restricted stock units. The table below reconciles the weighted-average basic and diluted common shares outstanding for 2017 , 2016 and 2015 : Year Ended December 31, 2017 2017 2016 2015 (in thousands) Weighted average number of common shares outstanding - basic 73,355 72,754 71,826 Effect of dilutive securities (1) 993 720 686 Weighted average number of common shares outstanding - diluted 74,348 73,474 72,512 (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. For the year ended December 31, 2017 , options to purchase less than a thousand shares, having a weighted average exercise price of $39.38 , were excluded from the computation. For the years ended December 2016 and 2015 , the computation excluded options to purchase 0.5 million and 0.9 million shares, having weighted average exercise prices of $34.14 and $29.34 , respectively. |
Contractual Obligations and Oth
Contractual Obligations and Other Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual Obligations and Other Contingencies | Contractual Obligations and Other Contingencies Line of Credit As of December 31, 2017 , the Company had a $300 million bank line of credit on which to draw for general corporate purposes. Amounts drawn under the line of credit are payable upon demand and generally bear interest at LIBOR plus 75 basis points (or if LIBOR becomes unavailable, the higher of the Prime Rate or the Overnight Bank Funding Rate plus 50 basis points ). At December 31, 2017 , there were $35.4 million in borrowings under the line of credit. The line of credit requires the Company to satisfy one financial covenant, with which the Company is in compliance as of December 31, 2017 and expects to remain in compliance. The line of credit expires on December 18, 2018 . At December 31, 2017 , the Company also had outstanding $77.6 million in irrevocable standby letters of credit, which relate to payment obligations under the Company's insurance programs. The letters of credit expire on January 2, 2019. In connection with the issuance of the letters of credit, the amount available under the line of credit was further reduced by $77.6 million to $187.0 million at December 31, 2017 . The letters of credit were decreased to $65.9 million on January 2, 2018 . Tax Jurisdictions and Matters The Company provides services throughout the continental United States and is subject to numerous state and local taxing jurisdictions. In the ordinary course of business, a jurisdiction may contest the Company’s reporting positions with respect to the application of its tax code to the Company’s services, which could result in additional tax liabilities. The Company has tax matters with various taxing authorities. Because of the uncertainties related to both the probable outcomes and amount of probable assessments due, the Company is unable to make a reasonable estimate of a liability. The Company does not expect the resolution of any of these matters, taken individually or in the aggregate, to have a material adverse effect on the consolidated financial position or results of operations based on the Company’s best estimate of the outcomes of such matters. Legal Proceedings The Company is 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 the Company becomes aware of such claims and legal actions, the Company records accruals for any exposures that are probable and estimable. If adverse outcomes of such claims and legal actions are reasonably possible, Management assesses materiality and provides 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 The Company’s clients are concentrated in the healthcare industry and are primarily providers of long-term care. The revenues of many of the Company’s clients are highly reliant on Medicare, Medicaid and third party payors’ reimbursement funding rates. New legislation or additional changes in existing regulations could directly impact the governmental reimbursement programs in which the clients participate. The full effect of any such programs would not be realized until these laws are fully implemented and government agencies issue applicable regulations or guidance. |
Accrued Insurance Claims
Accrued Insurance Claims | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Insurance Claims | Accrued Insurance Claims The Company currently has a Paid Loss Retrospective Insurance Plan for general liability and workers’ compensation insurance, which comprise approximately 30.7% of the Company’s liabilities at December 31, 2017 . Under the Company’s insurance plans for general liability and workers’ compensation, predetermined loss limits are arranged with the Company’s insurance company to limit both per occurrence cash outlay and annual insurance plan cost. The Company’s accounting for this plan utilizes current valuations from a third party actuary, which include assumptions based on data such as historical claims, pay-out experience, demographic factors, industry trends, severity factors, and other actuarial calculations. In the event that the Company’s claims experience and/or industry trends result in an unfavorable change in the assumptions or outcomes, it would have an adverse effect on the Company’s results of operations and financial condition. For general liability and workers’ compensation, the Company records both a reserve for the estimated future cost of claims and related expenses that have been reported but not settled, as well as an estimate of claims incurred but not reported. Such reserves for claims incurred but not reported are developed by a third party actuary through review of the Company’s historical data and open claims. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company evaluated all subsequent events through the date of this Annual Report on Form 10-K. There were no events or transactions occurring during this subsequent reporting period which require recognition or additional disclosure in these financial statements. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following tables summarize the unaudited quarterly financial data for the last two fiscal years. First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share amounts) 2017 Revenues $ 404,490 $ 470,876 $ 491,355 $ 499,410 Operating costs and expenses $ 373,780 $ 439,313 $ 459,864 $ 466,285 Income before income taxes $ 32,279 $ 33,078 $ 32,930 $ 34,678 Net income $ 22,017 $ 22,551 $ 23,472 $ 20,186 Basic earnings per common share $ 0.30 $ 0.31 $ 0.32 $ 0.27 Diluted earnings per common share $ 0.30 $ 0.30 $ 0.31 $ 0.27 Cash dividends declared per common share $ 0.18750 $ 0.18875 $ 0.19000 $ 0.19125 2016 Revenues $ 384,807 $ 386,556 $ 392,734 $ 398,565 Operating costs and expenses $ 355,390 $ 357,875 $ 363,522 $ 368,122 Income before income taxes $ 29,604 $ 29,683 $ 30,571 $ 30,529 Net income $ 18,626 $ 18,760 $ 19,711 $ 20,299 Basic earnings per common share $ 0.26 $ 0.26 $ 0.27 $ 0.28 Diluted earnings per common share $ 0.26 $ 0.26 $ 0.27 $ 0.28 Cash dividends declared per common share $ 0.18250 $ 0.18375 $ 0.18500 $ 0.18625 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | Schedule II — Valuation and Qualifying Accounts and Reserves Additions Description Beginning Balance Charged to Costs and Expenses Charged to Other Accounts Deductions Ending Balance (in thousands) 2017 Allowance for Doubtful Accounts $ 6,911 $ 6,250 $ — $ 1,176 $ 11,985 2016 Allowance for Doubtful Accounts $ 4,608 $ 4,629 $ — $ 2,326 $ 6,911 2015 Allowance for Doubtful Accounts $ 6,136 $ 4,335 $ — $ 5,863 $ 4,608 |
Description of Business and S27
Description of Business and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. Although the Company does not directly participate in any government reimbursement programs, the Company’s clients receive government reimbursements related to Medicare and Medicaid. Therefore, they are directly affected by any legislation relating to Medicare and Medicaid reimbursement programs. The Company provides services primarily pursuant to full service agreements with its clients. In such agreements, the Company is responsible for the day-to-day management of employees located at the clients’ facilities. The Company also provides services on the basis of management-only agreements for a limited number of clients. The Company’s agreements with its clients typically provide for a one year service term, cancelable by either party upon 30 to 90 days’ notice, after the initial 60 to 120 day period. The Company is organized into two reportable segments; housekeeping, laundry, linen and other services (“Housekeeping”), and dietary department services (“Dietary”). Housekeeping consists of managing the clients’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of a client’s facility, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at a client facility. Dietary consists of managing the clients’ dietary departments which are principally responsible for food purchasing, meal preparation and dietitian professional services, which includes the development of menus that meet residents’ dietary needs. |
Use of Estimates in Financial Statements | In preparing financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”), estimates and assumptions are made 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, the Company’s allowance for doubtful accounts, accrued insurance claims, 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. Management regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes. |
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. |
Fair Value of Financial Instruments | The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs (Levels 1 and 2) and minimize the use of unobservable inputs (Level 3) within the fair value hierarchy. Assets and liabilities are classified within the fair value hierarchy based on the lowest level (least observable) input that is significant to the measurement in its entirety. The Company’s financial instruments that are measured at fair value on a recurring basis consist of marketable securities and the deferred compensation fund investments. Other financial instruments such as cash and cash equivalents, accounts and notes receivable, accounts payable (including income taxes payable and accrued expenses) and borrowings under the Company’s line of credit are short-term in nature, and therefore the carrying value of these instruments are deemed to approximate their fair value. |
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 and cash equivalents are defined as short-term, highly liquid investments with a maturity of three months or less at time of purchase that are readily convertible into cash and have insignificant interest rate risk. |
Investments in Marketable Securities | Marketable securities are defined as fixed income investments which are highly liquid and can be readily purchased or sold through established markets. At December 31, 2017 , the Company had marketable securities of $73.2 million which were comprised primarily of tax exempt municipal bonds. These investments are accounted for as available-for-sale securities and are reported at fair value on the balance sheet. For the year ended December 31, 2017 , $1.1 million of unrealized gains related to these investments were recorded in other comprehensive income. Unrealized gains and losses are recorded net of income taxes. These assets are available for future needs under the Company’s self-insurance programs. The Company’s investment policy is intended to manage the assets to achieve the goals of preserving principal, maintaining adequate liquidity at all times, and maximizing returns subject to investment guidelines. The investment policy limits investment to certain types of instruments issued by institutions primarily with investment grade credit ratings and places restrictions on concentration by type and issuer. The Company periodically reviews the investments in marketable securities for other than temporary declines in fair value below the cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
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. |
Property and Equipment | Property and equipment are stated at cost, net of accumulated depreciation. Additions, renewals and improvements are capitalized, while maintenance and repair costs are expensed when incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in income. Depreciation is recorded using the straight-line method over the following estimated useful lives: Housekeeping and Dietary equipment — 5 to 7 years; computer hardware and software — 3 to 7 years; and other, consisting of furniture and fixtures, leasehold improvements and vehicles — 5 to 10 years. |
Revenue Recognition | Revenues from the Company’s service agreements with clients are recognized as services are performed. Revenues are reported net of sales taxes that are collected from customers and remitted to taxing authorities. |
Income Taxes | The Company uses 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 year. The Company accrues 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 financial reporting and tax basis 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. Deferred tax assets and liabilities are more fully described in Note 12. Uncertain income tax positions taken or expected to be taken in tax returns are reflected within the Company’s financial statements based on a recognition and measurement process. |
Earnings per Common Share | Basic earnings per common share is 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 is calculated using the weighted-average number of common shares outstanding and dilutive common shares, such as those issuable upon exercise of stock options and upon the vesting of restricted stock and restricted stock units. |
Share-Based Compensation | The Company estimates the fair value of share-based awards on the date of grant using the Black-Scholes valuation model for stock options and using the share price on the date of grant for restricted stock and restricted stock units. The value of the award is recognized ratably as an expense in the Company’s Consolidated Statements of Comprehensive Income over the requisite service periods, with adjustments made for forfeitures as they occur. |
Advertising Costs | Advertising costs are expensed when incurred. |
Impairment of Long-Lived Assets | The carrying amounts of long-lived assets are periodically reviewed to determine whether current events or circumstances warrant adjustment to such carrying amounts. Any impairment would be measured as the amount that the carrying value of such assets exceeds their fair value, primarily based on estimated undiscounted cash flows. Considerable management judgment is necessary to estimate the fair value of assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value, less cost to sell. |
Identifiable Intangible Assets and Goodwill | Identifiable intangible assets are amortized on a straight-line basis over their respective lives. Goodwill represents the excess of cost over the fair value of net assets of acquired businesses. Management reviews the carrying value of goodwill at least annually during the fourth quarter of each year to assess for impairment, or more often if events or circumstances indicate that the carrying value may exceed its estimated fair value. |
Treasury Stock | Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains or losses on the subsequent reissuance of shares are credited or charged to additional paid in capital. |
Reclassification | Certain prior period amounts have been reclassified to conform to current year presentation. |
Concentrations of Credit Risk | The Company’s financial instruments that are subject to concentrations of credit risk are cash and cash equivalents, marketable securities, deferred compensation funding and accounts and notes receivable. The Company’s marketable securities are fixed income investments which are highly liquid and can be readily purchased or sold using established markets. At December 31, 2017 and 2016 , substantially all of the Company’s cash and cash equivalents and marketable securities were held in one large financial institution located in the United States. The Company’s clients are concentrated in the healthcare industry, and are primarily providers of long-term care. The revenues of many of the Company’s clients are highly reliant on Medicare, Medicaid and third-party payors’ reimbursement funding rates. New legislation or changes in existing regulations could be made which could directly impact the governmental reimbursement programs in which the clients participate. As a result, the Company may not know the full effects of such programs until these laws are fully implemented and governmental agencies issue applicable regulations or guidance. |
Significant Clients | For the year ended December 31, 2017 , the Company had several clients who individually contributed over 3%, with one client, a multi-state operator, contributing as high as 17.6% , of the Company’s total consolidated revenues. Although the Company expects to continue its relationships with these clients, there can be no assurance thereof. The loss, individually or in the aggregate, of such clients, or a significant reduction in the revenues the Company receives from such clients, could have a material adverse effect on the Company’s results of operations. In addition, if any of these clients change or alter current payments terms, it could increase the Company’s accounts receivables balance and have a material adverse effect on the Company’s cash flows. |
Recent Accounting Pronouncements | In March 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-09, Stock Compensation: Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 was intended to simplify several aspects of the accounting for share-based payments. The Company adopted the standard beginning January 1, 2017. The impact of adopting the standard included the recognition of excess tax benefits related to share-based payments as a component of income tax expense, as opposed to additional paid-in capital; an amendment to the calculation of diluted earnings per share to exclude windfall tax benefits from assumed proceeds when calculating diluted shares outstanding; as well as accounting for forfeitures of share-based awards as they occur, as opposed to reserving for estimated forfeitures. The most material impact of the adoption was a reduction to income tax expense in 2017 of $5.7 million . In January 2017, the FASB issued ASU 2017-01, Business Combinations: Clarifying the Definition of a Business . The guidance changes the definition of a business to assist entities in evaluating whether a set of transferred assets and activities constitutes a business under Topic 805. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted. The Company adopted the standard effective January 1, 2018. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which was subsequently amended and updated throughout 2015 and 2016. The standard provides guidance on revenue recognition, among other topics such as the accounting for compensation and costs to obtain a contract. 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. Adoption is required for reporting periods beginning after December 15, 2017, with early adoption prohibited. The Company adopted the standard beginning on January 1, 2018 utilizing the modified retrospective method. The Company has evaluated the impact of the adoption of the standard by reviewing the nature and terms of existing contracts under the provisions of the new guidance and designing operational and process updates required for ongoing compliance. Management does not expect this guidance to result in a material impact to the Company's accounting for the revenue earned related to its Housekeeping and Dietary department services and accordingly, does not expect to record an adjustment to its consolidated financial statements upon adoption of the standard. Management anticipates that the most significant impact of the new standard will relate to additional disclosure obligations. 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 will adopt the new guidance as of January 1, 2019. Management is continuing to evaluate the expected impact of the requirements, however it is expected that the primary impact will relate to the capitalization of operating leases of office space, vehicles and equipment. |
Changes in Accumulated Other 28
Changes in Accumulated Other Comprehensive Income by Component (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Income | The following table provides a summary of changes in accumulated other comprehensive income, net of taxes: Unrealized Gains and (Losses) on Available-for Sale-Securities (1) 2017 2016 2015 (in thousands) Accumulated other comprehensive (loss) income — beginning balance $ (319 ) $ 543 $ 25 Other comprehensive income (loss) before reclassifications 1,149 (1,005 ) 535 Losses (gains) reclassified from other comprehensive income (2) 7 143 (17 ) Net current period other comprehensive income (loss) (3) 1,156 (862 ) 518 Accumulated other comprehensive income (loss) — ending balance $ 837 $ (319 ) $ 543 (1) All amounts are net of tax. (2) For the years ended December 31, 2017 and 2016 , the Company recorded less than $0.1 million and $0.2 million of realized losses from the sale of available-for-sale securities, respectively. For the year ended December 31, 2015 , the Company recorded less than $0.1 million of realized gains for the sale of available-for-sale securities. Refer to Note 5 herein for further information. (3) For the years ended December 31, 2017 and 2015, the changes in other comprehensive income were both net of tax expense of $ 0.3 million . For the year ended December 31, 2016, the changes in other comprehensive income were net of a tax benefit of $ 0.5 million . |
Reclassification out of Accumulated Other Comprehensive Income | Amounts Reclassified from Accumulated Other Comprehensive Income 2017 2016 2015 For the Year Ended December 31, (in thousands) Losses (gains) from the sale of available-for-sale securities $ 11 $ 222 $ (27 ) Tax (benefit) expense (4 ) (79 ) 10 Net loss (gain) reclassified from accumulated other comprehensive income 7 $ 143 $ (17 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 asset as of December 31, 2017 and December 31, 2016 : December 31, 2017 December 31, 2016 (in thousands) Housekeeping and Dietary equipment $ 22,349 $ 21,136 Computer hardware and software 12,665 11,750 Other (1) 990 1,133 Total property and equipment, at cost $ 36,004 $ 34,019 Less accumulated depreciation 22,495 20,564 Total property and equipment, net $ 13,509 $ 13,455 (1) Includes furniture and fixtures, leasehold improvements and autos and trucks. |
Goodwill and Other Intangible30
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Estimated Amortization Expense For Intangibles Subject To Amortization | The following table sets forth the estimated amortization expense for intangibles subject to amortization for the next five years and thereafter: Period/Year Total Amortization Expense (in thousands) 2018 $ 4,364 2019 $ 4,165 2020 $ 4,165 2021 $ 4,165 2022 $ 4,165 Thereafter $ 9,859 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | The following tables provide fair value measurement information for the Company’s marketable securities and deferred compensation fund investment assets as of December 31, 2017 and 2016 : As of December 31, 2017 Fair Value Measurement Using: Carrying Total Fair Quoted Significant Significant (in thousands) Financial Assets: Marketable securities Municipal bonds — available-for-sale $ 73,221 $ 73,221 $ — $ 73,221 $ — Deferred compensation fund Money Market (1) $ 2,720 $ 2,720 $ — $ 2,720 $ — Balanced and Lifestyle 8,523 8,523 8,523 — — Large Cap Growth 7,802 7,802 7,802 — — Small Cap Growth 3,442 3,442 3,442 — — Fixed Income 3,050 3,050 3,050 — — International 1,531 1,531 1,531 — — Mid Cap Growth 1,817 1,817 1,817 — — Deferred compensation fund $ 28,885 $ 28,885 $ 26,165 $ 2,720 $ — As of December 31, 2016 Fair Value Measurement Using: Carrying Total Fair Quoted Significant Significant (in thousands) Financial Assets: Marketable securities Municipal bonds — available-for-sale $ 67,730 $ 67,730 $ — $ 67,730 $ — Deferred compensation fund Money Market (1) $ 3,147 $ 3,147 $ — $ 3,147 $ — Balanced and Lifestyle 7,162 7,162 7,162 — — Large Cap Growth 5,583 5,583 5,583 — — Small Cap Value 2,933 2,933 2,933 — — Fixed Income 2,752 2,752 2,752 — — International 1,132 1,132 1,132 — — Mid Cap Growth 1,410 1,410 1,410 — — Deferred compensation fund $ 24,119 $ 24,119 $ 20,972 $ 3,147 $ — (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 (in thousands) December 31, 2017 Marketable securities Municipal bonds — available-for-sale $ 72,249 $ 1,169 $ (197 ) $ 73,221 $ — Total debt securities $ 72,249 $ 1,169 $ (197 ) $ 73,221 $ — December 31, 2016 Marketable securities Municipal bonds — available-for-sale $ 68,220 $ 178 $ (668 ) $ 67,730 $ — Total debt securities $ 68,220 $ 178 $ (668 ) $ 67,730 $ — December 31, 2015 Marketable securities Municipal bonds — available-for-sale $ 68,640 $ 869 $ (13 ) $ 69,496 $ — Total debt securities $ 68,640 $ 869 $ (13 ) $ 69,496 $ — |
Contractual Maturities of Available For Sale Investments | The following table summarizes the contractual maturities of debt securities held at December 31, 2017 and 2016 , which are classified as marketable securities in the Consolidated Balance Sheets: Municipal Bonds — Available-for-Sale December 31, 2017 2016 (in thousands) Contractual maturity: Maturing in one year or less $ 916 $ 973 Maturing in second year through fifth year 15,948 28,671 Maturing in sixth year through tenth year 22,851 21,651 Maturing after ten years 33,506 16,435 Total debt securities $ 73,221 $ 67,730 |
Allowance for Doubtful Accoun32
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Allowance for Doubtful Debts | In order to provide for these collection problems and the general risk associated with the granting of credit terms, the Company recorded the following bad debt provisions (in an Allowance for Doubtful Accounts): Year Ended December 31, 2017 2016 2015 (in thousands) Bad debt provision $ 6,250 $ 4,629 $ 4,335 |
Impaired Notes Receivable | Summary schedules of impaired notes receivable, and the related reserve, for the years ended December 31, 2017 , 2016 and 2015 are as follows: Impaired Notes Receivable Year Ended December 31, Balance Beginning of Year Additions Deductions Balance End of Year Average Outstanding Balance (in thousands) 2017 $ 5,685 $ 1,169 $ — $ 6,854 $ 6,270 2016 $ 6,471 $ — $ 786 $ 5,685 $ 6,078 2015 $ 10,208 $ 395 $ 4,132 $ 6,471 $ 8,340 Reserve for Impaired Notes Receivable Year Ended December 31, Balance Beginning of Year Additions Deductions Balance End of Year (in thousands) 2017 $ 2,419 $ 465 $ — $ 2,884 2016 $ 2,139 $ 280 $ — $ 2,419 2015 $ 3,031 $ 99 $ 991 $ 2,139 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases, Operating [Abstract] | |
Future Minimum Lease Payments under Operating Leases | The following is a schedule by calendar year of future minimum lease payments under operating leases that have remaining terms as of December 31, 2017 : Period/Year Operating Leases (in thousands) 2018 $ 2,482 2019 1,968 2020 1,489 2021 734 2022 735 Thereafter 1,710 Total minimum lease payments $ 9,118 |
Operating Leases Expense | Total expense for all operating leases for the years ended December 31, 2017 , 2016 and 2015 was as follows: Year Ended December 31, 2017 2016 2015 (in thousands) Operating lease expense $ 3,833 $ 2,615 $ 2,003 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation Expense | A summary of stock-based compensation expense and related tax benefits for the years ended December 31, 2017 , 2016 and 2015 is as follows: Year Ended December 31, 2017 2016 2015 (in thousands) Stock options $ 3,740 $ 3,193 $ 2,781 Restricted stock and restricted stock units 1,205 550 252 Employee Stock Purchase Plan 1,040 509 508 Total pre-tax stock-based compensation expense charged against income (1) $ 5,985 $ 4,252 $ 3,541 Total recognized tax benefit related to stock-based compensation $ 5,709 $ 2,773 $ 1,873 (1) Stock-based compensation expense is recorded in the selling, general and administrative caption in the Consolidated Statements of Comprehensive Income. |
Summary of Stock Options Activity | A summary of stock options outstanding under the Plan as of December 31, 2017 and changes during 2017 is as follows: Number of Shares Weighted Average Exercise Price (in thousands, except per share data) December 31, 2016 2,615 $ 24.61 Granted 544 $ 39.38 Exercised (682 ) $ 18.95 Forfeited (100 ) $ 34.10 Expired (3 ) $ 23.49 December 31, 2017 2,374 $ 29.22 |
Assumption for Fair Value of Options Granted | The fair value of the stock option awards granted during 2017 , 2016 and 2015 were estimated on the dates of grant using the Black-Scholes option valuation model and the following assumptions: Year Ended December 31, 2017 2016 2015 Risk-free interest rate 2.0 % 2.0 % 1.9 % Weighted average expected life 5.8 years 5.8 years 5.8 years Expected volatility 25.1 % 26.0 % 27.2 % Dividend yield 1.9 % 2.0 % 2.2 % |
Summarized Information of Stock Options Outstanding | The following table summarizes other information about the stock options at December 31, 2017 : December 31, 2017 (dollars in thousands, except per share data) Outstanding: Aggregate intrinsic value $ 55,789 Weighted average remaining contractual life 6.5 years Exercisable: Number of options 954 Weighted average exercise price $ 22.19 Aggregate intrinsic value $ 29,134 Weighted average remaining contractual life 4.7 years |
Summary of Stock Options Outstanding | A summary of the outstanding restricted stock units as of December 31, 2017 and changes during 2017 is as follows: Number of Restricted Units Weighted Average Grant Date Fair Value (in thousands, except per share data) December 31, 2016 — $ — Granted 88 $ 40.16 Vested — $ — Forfeited — $ — December 31, 2017 88 $ 40.16 A summary of the restricted stock outstanding under the Plan as of December 31, 2017 and changes during 2017 are as follows: Number of Restricted Shares Weighted Average Grant-Date Fair Value (in thousands, except per share data) December 31, 2016 74 $ 32.09 Granted — $ — Vested (17 ) $ 31.41 Forfeited — $ — December 31, 2017 57 $ 32.30 |
Weighted Average Grant-Date Fair Values and Intrinsic Values of Options Vested | The weighted average grant-date fair values and total fair values of restricted stock vested during 2017 , 2016 and 2015 are as follows: Year Ended December 31, 2017 2016 2015 (in thousands, except per share data) Weighted average grant-date fair value of restricted stock granted $ — $ 34.14 $ 30.30 Total fair value of restricted stock vested $ 690 $ 311 $ 123 |
Summary of ESPP Annual Offerings | The following table summarizes information about the Company’s ESPP annual offerings for the years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, 2017 2016 2015 (in thousands, except per share data) Common shares purchased 54 53 59 Per common share purchase price $ 33.29 $ 29.64 $ 26.29 |
Summary of Information Of SERP | The following table summarizes information about the SERP for the plan years ended December 31, 2017 , 2016 and 2015 : Year Ended December 31, 2017 2016 2015 (in thousands) SERP expense (1) $ 503 $ 511 $ 538 Treasury shares issued to fund SERP expense (2) 9 13 15 SERP trust account balance at December 31 (3) $ 42,467 $ 34,599 $ 37,765 Unrealized gain (loss) recorded in SERP liability account $ 4,534 $ 1,495 $ (62 ) (1) Both the SERP match and the deferrals are included in the selling, general and administrative caption in the Consolidated Statements of Comprehensive Income. (2) Shares related to the SERP match for each year are funded at the beginning of the subsequent year. (3) SERP trust account investments are recorded at their fair value which is based on quoted market prices. Differences between such amounts in the table above and the deferred compensation funding asset reported on the Consolidated Balance Sheets represent the value of Company Common Stock held in the Plan participants’ trust accounts and reported by the Company as treasury stock in the Consolidated Balance Sheets. |
Dividends (Tables)
Dividends (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Dividend Payments | During 2017 , the Company paid regular quarterly cash dividends totaling $55.2 million as detailed below: Paid During the Quarter Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 (in thousands, except per share amounts) Cash dividends paid per common share $ 0.18625 $ 0.18750 $ 0.18875 $ 0.19000 Total cash dividends paid $ 13,624 $ 13,750 $ 13,883 $ 13,987 Record date February 17, 2017 May 19, 2017 August 18, 2017 November 17, 2017 Payment date March 24, 2017 June 23, 2017 September 22, 2017 December 22, 2017 |
Dividends Payable on Outstanding Weighted Average Basic Common Shares | Cash dividends declared on the Company’s outstanding weighted average number of basic common shares for the years ended December 31, 2017 , 2016 and 2015 were as follows: Year Ended December 31, 2017 2016 2015 Cash dividends declared per common share $ 0.75750 $ 0.73750 $ 0.71750 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Provision for Income Taxes | The following table summarizes the provision for income taxes: Year Ended December 31, 2017 2016 2015 (in thousands) Current: Federal $ 35,673 $ 33,032 $ 11,917 State 7,179 6,958 2,173 42,852 39,990 14,090 Deferred: Federal 2,924 2,163 13,646 State (1,037 ) 838 4,004 1,887 3,001 17,650 Tax provision $ 44,739 $ 42,991 $ 31,740 |
Significant Components of Federal and State Deferred Tax Assets and Liabilities | Significant components of the Company’s federal and state deferred tax asset and liability balances are as follows: Year Ended December 31, 2017 2016 (in thousands) Deferred tax assets: Allowance for doubtful accounts $ 3,109 $ 2,672 Deferred compensation 6,601 8,532 Accrued insurance claims 3,665 5,862 Non-deductible reserves 567 1,257 Amortization of intangibles 162 624 Other 662 858 14,766 19,805 Deferred tax liabilities: Expensing of housekeeping supplies (4,678 ) (6,752 ) Depreciation of property and equipment (1,745 ) (2,568 ) Other (845 ) (663 ) (7,268 ) (9,983 ) Net deferred tax assets $ 7,498 $ 9,822 |
Reconciliation of The Provision for Income Taxes | The table below provides a reconciliation between the tax expense computed by applying the statutory federal income tax rate to income before income taxes and the provision for income taxes: Year Ended December 31, 2017 2016 2015 (in thousands) Income tax expense computed at statutory rate $ 46,538 $ 42,136 $ 31,418 Increases (decreases) resulting from: State income taxes, net of federal tax benefit 3,661 5,064 4,015 Federal jobs credits (4,193 ) (4,550 ) (3,900 ) Tax exempt interest (568 ) (457 ) (132 ) Other, net (699 ) 798 339 Income tax expense $ 44,739 $ 42,991 $ 31,740 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Information of Reportable Segments | All revenues and net income are earned in the United States. Year Ended December 31, 2017 2016 2015 (in thousands) Revenues (1) Housekeeping services $ 979,610 $ 957,148 $ 909,709 Dietary services 886,521 605,514 527,140 Corporate and eliminations — — — Consolidated $ 1,866,131 $ 1,562,662 $ 1,436,849 Income before income taxes Housekeeping services $ 95,505 $ 90,756 $ 84,471 Dietary services 46,008 34,641 31,612 Corporate and eliminations (2) (8,548 ) (5,010 ) (26,319 ) Consolidated $ 132,965 $ 120,387 $ 89,764 Depreciation and amortization Housekeeping services $ 6,547 $ 6,535 $ 6,488 Dietary services 1,813 439 685 Corporate and eliminations 526 522 487 Consolidated $ 8,886 $ 7,496 $ 7,660 Total assets Housekeeping services $ 304,303 $ 266,464 $ 228,116 Dietary services 242,874 127,187 104,797 Corporate and eliminations (3) 128,826 134,795 148,036 Consolidated $ 676,003 $ 528,446 $ 480,949 Capital expenditures Housekeeping services $ 4,287 $ 4,612 $ 3,586 Dietary services 663 410 336 Corporate and eliminations 447 420 1,076 Consolidated $ 5,397 $ 5,442 $ 4,998 (1) For the year ended December 31, 2017 , the Company earned revenue from one customer that amounted to more than 10% of total consolidated revenues. Housekeeping services and Dietary services both earned revenue from the customer, the total of which amounted to $327.5 million . (2) Represents primarily corporate office cost 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. (3) Primarily consists of cash and cash equivalents, marketable securities, deferred income taxes and other current and noncurrent assets. |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Earnings Per Share | The table below reconciles the weighted-average basic and diluted common shares outstanding for 2017 , 2016 and 2015 : Year Ended December 31, 2017 2017 2016 2015 (in thousands) Weighted average number of common shares outstanding - basic 73,355 72,754 71,826 Effect of dilutive securities (1) 993 720 686 Weighted average number of common shares outstanding - diluted 74,348 73,474 72,512 (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. For the year ended December 31, 2017 , options to purchase less than a thousand shares, having a weighted average exercise price of $39.38 , were excluded from the computation. For the years ended December 2016 and 2015 , the computation excluded options to purchase 0.5 million and 0.9 million shares, having weighted average exercise prices of $34.14 and $29.34 , respectively. |
Selected Quarterly Financial 39
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data | The following tables summarize the unaudited quarterly financial data for the last two fiscal years. First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share amounts) 2017 Revenues $ 404,490 $ 470,876 $ 491,355 $ 499,410 Operating costs and expenses $ 373,780 $ 439,313 $ 459,864 $ 466,285 Income before income taxes $ 32,279 $ 33,078 $ 32,930 $ 34,678 Net income $ 22,017 $ 22,551 $ 23,472 $ 20,186 Basic earnings per common share $ 0.30 $ 0.31 $ 0.32 $ 0.27 Diluted earnings per common share $ 0.30 $ 0.30 $ 0.31 $ 0.27 Cash dividends declared per common share $ 0.18750 $ 0.18875 $ 0.19000 $ 0.19125 2016 Revenues $ 384,807 $ 386,556 $ 392,734 $ 398,565 Operating costs and expenses $ 355,390 $ 357,875 $ 363,522 $ 368,122 Income before income taxes $ 29,604 $ 29,683 $ 30,571 $ 30,529 Net income $ 18,626 $ 18,760 $ 19,711 $ 20,299 Basic earnings per common share $ 0.26 $ 0.26 $ 0.27 $ 0.28 Diluted earnings per common share $ 0.26 $ 0.26 $ 0.27 $ 0.28 Cash dividends declared per common share $ 0.18250 $ 0.18375 $ 0.18500 $ 0.18625 |
Description of Business and S40
Description of Business and Significant Accounting Policies - Nature of Operations (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Schedule of Accounting Policies [Line Items] | |
Service agreement term | 1 year |
Number of reportable segments | 2 |
Minimum | |
Schedule of Accounting Policies [Line Items] | |
Days to notify cancellation of service | 30 days |
Initial period of service term | 60 days |
Maximum | |
Schedule of Accounting Policies [Line Items] | |
Days to notify cancellation of service | 90 days |
Initial period of service term | 120 days |
Description of Business and S41
Description of Business and Significant Accounting Policies - Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Notes receivable | $ 6.9 | $ 5.7 |
Discounted notes receivable | $ 6.8 | $ 5.7 |
Description of Business and S42
Description of Business and Significant Accounting Policies - Investments in Marketable Securities and Inventories and Supplies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Marketable securities, at fair value | $ 73,221 | $ 67,730 |
Unrealized gains from marketable securities | $ 1,100 | |
Amortization period of inventories and supplies | 24 months |
Description of Business and S43
Description of Business and Significant Accounting Policies - Property and Equipment and Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 5 | $ 4.8 | $ 4.4 |
Housekeeping and Dietary equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Housekeeping and Dietary equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 7 years | ||
Computer hardware and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Computer hardware and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 7 years | ||
Autos and Trucks | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Autos and Trucks | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years |
Description of Business and S44
Description of Business and Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 0 | $ 0 | $ 0 |
Description of Business and S45
Description of Business and Significant Accounting Policies - Identifiable Intangible Assets and Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Impairment loss on goodwill and intangible assets | $ 0 | $ 0 | $ 0 |
Description of Business and S46
Description of Business and Significant Accounting Policies - Concentrations of Credit Risk and Significant Clients (Details) - financial_institution | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Number of financial institutions holding cash and cash equivalents and marketable securities | 1 | 1 |
Percentage of revenue from major customer | 17.60% |
Description of Business and S47
Description of Business and Significant Accounting Policies - Recent Accounting Pronouncements (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Accounting Policies [Abstract] | |
Share-based compensation, excess tax benefit | $ 5.7 |
Changes in Accumulated Other 48
Changes in Accumulated Other Comprehensive Income by Component - Summary of Changes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance | $ 338,842 | $ 296,456 | $ 275,830 |
Other comprehensive income (loss) before reclassifications | 1,149 | (1,005) | 535 |
Losses (gains) reclassified from other comprehensive income | 7 | 143 | (17) |
Net current period other comprehensive income (loss) | 1,156 | (862) | 518 |
Balance | 399,952 | 338,842 | 296,456 |
Realized (loss) gain on sales of available-for-sale securities | 200 | ||
Changes in other comprehensive income (loss), tax expense (benefit) | 300 | (500) | 300 |
Accumulated Other Comprehensive Income (Loss), net of Taxes | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance | (319) | 543 | 25 |
Balance | 837 | $ (319) | 543 |
Maximum | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Realized (loss) gain on sales of available-for-sale securities | $ (100) | $ 100 |
Changes in Accumulated Other 49
Changes in Accumulated Other Comprehensive Income by Component - Reclassification Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Tax (benefit) expense | $ (44,739) | $ (42,991) | $ (31,740) | ||||||||
Net income | $ 20,186 | $ 23,472 | $ 22,551 | $ 22,017 | $ 20,299 | $ 19,711 | $ 18,760 | $ 18,626 | 88,226 | 77,396 | 58,024 |
Realized Gains (Losses) on Sale of Available-for-sale Securities | Amounts Reclassified from Accumulated Other Comprehensive Income | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Losses (gains) from the sale of available-for-sale securities | 11 | 222 | (27) | ||||||||
Tax (benefit) expense | (4) | (79) | 10 | ||||||||
Net income | $ 7 | $ 143 | $ (17) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, at cost | $ 36,004 | $ 34,019 | |
Less accumulated depreciation | 22,495 | 20,564 | |
Total property and equipment, net | 13,509 | 13,455 | |
Depreciation | 5,000 | 4,800 | $ 4,400 |
Housekeeping and Dietary equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, at cost | 22,349 | 21,136 | |
Computer hardware and software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, at cost | 12,665 | 11,750 | |
Other | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, at cost | $ 990 | $ 1,133 |
Goodwill and Other Intangible51
Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||
Goodwill | $ 51,084 | $ 44,438 | |
Amortization expense | $ 3,900 | 2,700 | $ 3,200 |
Customer Relationships | |||
Goodwill [Line Items] | |||
Useful life | 9 years 11 months | ||
Housekeeping Segment | |||
Goodwill [Line Items] | |||
Goodwill | $ 42,400 | 42,400 | |
Dietary Segment | |||
Goodwill [Line Items] | |||
Goodwill | $ 8,700 | $ 2,100 |
Goodwill and Other Intangible52
Goodwill and Other Intangible Assets - Estimated Amortization Expense for Intangibles Subject to Amortization (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2,018 | $ 4,364 |
2,019 | 4,165 |
2,020 | 4,165 |
2,021 | 4,165 |
2,022 | 4,165 |
Thereafter | $ 9,859 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |||
Unrealized gain (loss) on available-for-sale marketable securities, net of taxes | $ 1,156 | $ (862) | $ 518 |
Proceeds from available for sale municipal bonds | 28,500 | 28,100 | 16,400 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Realized (loss) gain on sales of available-for-sale securities | $ 200 | ||
Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Realized (loss) gain on sales of available-for-sale securities | $ (100) | $ 100 |
Fair Value Measurements - Marke
Fair Value Measurements - Marketable Securities and Deferred Compensation Fund Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Financial Assets: | ||
Marketable securities | $ 73,221 | $ 67,730 |
Deferred compensation fund | 28,885 | 24,119 |
Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 26,165 | 20,972 |
Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 2,720 | 3,147 |
Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 28,885 | 24,119 |
Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 28,885 | 24,119 |
Municipal bonds — available-for-sale | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Marketable securities | 0 | 0 |
Municipal bonds — available-for-sale | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Marketable securities | 73,221 | 67,730 |
Municipal bonds — available-for-sale | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Marketable securities | 0 | 0 |
Municipal bonds — available-for-sale | Carrying Amount | ||
Financial Assets: | ||
Marketable securities | 73,221 | 67,730 |
Municipal bonds — available-for-sale | Total Fair Value | ||
Financial Assets: | ||
Marketable securities | 73,221 | 67,730 |
Money Market | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Money Market | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 2,720 | 3,147 |
Money Market | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Money Market | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 2,720 | 3,147 |
Money Market | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 2,720 | 3,147 |
Balanced and Lifestyle | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 8,523 | 7,162 |
Balanced and Lifestyle | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Balanced and Lifestyle | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Balanced and Lifestyle | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 8,523 | 7,162 |
Balanced and Lifestyle | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 8,523 | 7,162 |
Large Cap Growth | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 7,802 | 5,583 |
Large Cap Growth | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Large Cap Growth | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Large Cap Growth | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 7,802 | 5,583 |
Large Cap Growth | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 7,802 | 5,583 |
Small Cap Value | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 2,933 | |
Small Cap Value | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | |
Small Cap Value | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | |
Small Cap Value | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 2,933 | |
Small Cap Value | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 2,933 | |
Small Cap Growth | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 3,442 | |
Small Cap Growth | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | |
Small Cap Growth | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | |
Small Cap Growth | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 3,442 | |
Small Cap Growth | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 3,442 | |
Fixed Income | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 3,050 | 2,752 |
Fixed Income | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Fixed Income | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Fixed Income | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 3,050 | 2,752 |
Fixed Income | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 3,050 | 2,752 |
International | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 1,531 | 1,132 |
International | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
International | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
International | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 1,531 | 1,132 |
International | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | 1,531 | 1,132 |
Mid Cap Growth | Quoted Prices in Active Markets (Level 1) | ||
Financial Assets: | ||
Deferred compensation fund | 1,817 | 1,410 |
Mid Cap Growth | Significant Other Observable Inputs (Level 2) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Mid Cap Growth | Significant Unobservable Inputs (Level 3) | ||
Financial Assets: | ||
Deferred compensation fund | 0 | 0 |
Mid Cap Growth | Carrying Amount | ||
Financial Assets: | ||
Deferred compensation fund | 1,817 | 1,410 |
Mid Cap Growth | Total Fair Value | ||
Financial Assets: | ||
Deferred compensation fund | $ 1,817 | $ 1,410 |
Fair Value Measurements - Mar55
Fair Value Measurements - Marketable Debt Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Amortized Cost | $ 72,249 | $ 68,220 | $ 68,640 |
Gross Unrealized Gains | 1,169 | 178 | 869 |
Gross Unrealized Losses | (197) | (668) | (13) |
Estimated Fair Value | 73,221 | 67,730 | 69,496 |
Other-Than-Temporary Impairments | 0 | 0 | 0 |
Municipal bonds — available-for-sale | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Amortized Cost | 72,249 | 68,220 | 68,640 |
Gross Unrealized Gains | 1,169 | 178 | 869 |
Gross Unrealized Losses | (197) | (668) | (13) |
Estimated Fair Value | 73,221 | 67,730 | 69,496 |
Other-Than-Temporary Impairments | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Contr
Fair Value Measurements - Contractual Maturities of Available for Sale Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Disclosures [Abstract] | |||
Maturing in one year or less | $ 916 | $ 973 | |
Maturing in second year through fifth year | 15,948 | 28,671 | |
Maturing in sixth year through tenth year | 22,851 | 21,651 | |
Maturing after ten years | 33,506 | 16,435 | |
Total debt securities | $ 73,221 | $ 67,730 | $ 69,496 |
Accounts and Notes Receivable (
Accounts and Notes Receivable (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Notes outstanding, net | $ 36.6 | $ 19.2 |
Allowance for Doubtful Accoun58
Allowance for Doubtful Accounts - Bad Debt Provisions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | |||
Bad debt provision | $ 6,250 | $ 4,629 | $ 4,335 |
Provision for doubtful accounts, percentage of revenue | 0.30% | 0.30% | 0.30% |
Allowance for Doubtful Accoun59
Allowance for Doubtful Accounts - Impaired Notes Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Impaired Notes Receivable: | |||
Balance beginning of year | $ 5,685 | $ 6,471 | $ 10,208 |
Additions | 1,169 | 0 | 395 |
Deductions | 0 | 786 | 4,132 |
Balance end of year | 6,854 | 5,685 | 6,471 |
Average Outstanding balance | 6,270 | 6,078 | 8,340 |
Reserve for Impaired Notes Receivable: | |||
Balance beginning of year | 2,419 | 2,139 | 3,031 |
Additions | 465 | 280 | 99 |
Deductions | 0 | 0 | 991 |
Balance end of year | $ 2,884 | $ 2,419 | $ 2,139 |
Lease Commitments - Future Mini
Lease Commitments - Future Minimum Lease Payments Under Operating Leases (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases | |
2,018 | $ 2,482 |
2,019 | 1,968 |
2,020 | 1,489 |
2,021 | 734 |
2,022 | 735 |
Thereafter | 1,710 |
Total minimum lease payments | $ 9,118 |
Lease Commitments - Operating L
Lease Commitments - Operating Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Leases, Operating [Abstract] | |||
Operating lease expense | $ 3,833 | $ 2,615 | $ 2,003 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total pre-tax stock-based compensation expense charged against income | $ 5,985 | $ 4,252 | $ 3,541 |
Total recognized tax benefit related to stock-based compensation | 5,709 | 2,773 | 1,873 |
Unrecognized compensation cost | $ 11,400 | ||
Period of expense of unrecognized compensation cost, years | 2 years 8 months 12 days | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total pre-tax stock-based compensation expense charged against income | $ 3,740 | 3,193 | 2,781 |
Restricted stock and restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total pre-tax stock-based compensation expense charged against income | 1,205 | 550 | 252 |
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 | $ 1,040 | $ 509 | $ 508 |
Share-Based Compensation - 2012
Share-Based Compensation - 2012 Equity Incentive Plan (Details) shares in Millions | 12 Months Ended |
Dec. 31, 2017shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common stock reserved for future issuance (in shares) | 3.2 |
Shares available for future grant (in shares) | 0.8 |
Maximum term of grants | 10 years |
Options vested and exercisable, period | 5 years |
Share-Based Compensation - Su64
Share-Based Compensation - Summary of Stock Options Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Number of Shares | |
Beginning of period (in shares) | shares | 2,615 |
Granted (in shares) | shares | 544 |
Exercised (in shares) | shares | (682) |
Forfeited (in shares) | shares | (100) |
Expired (in shares) | shares | (3) |
End of period (in shares) | shares | 2,374 |
Weighted Average Exercise Price | |
Beginning of period (in dollars per share) | $ / shares | $ 24.61 |
Granted (in dollars per share) | $ / shares | 39.38 |
Exercised (in dollars per share) | $ / shares | 18.95 |
Forfeited (in dollars per share) | $ / shares | 34.10 |
Expired (in dollars per share) | $ / shares | 23.49 |
End of period (in dollars per share) | $ / shares | $ 29.22 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options, Summary of Other Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Tax benefit from exercise of stock options | $ 5.3 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value of stock options granted (in dollars per share) | $ 8.52 | $ 7.46 | $ 6.64 |
Total intrinsic value of options exercised | $ 19.5 | $ 4.9 | $ 6.5 |
Share-Based Compensation - St66
Share-Based Compensation - Stock Options, Schedule of Assumptions for Fair Value of Options Granted (Details) - Stock Options | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.00% | 2.00% | 1.90% |
Weighted average expected life in years | 5 years 10 months | 5 years 10 months | 5 years 10 months |
Expected volatility | 25.10% | 26.00% | 27.20% |
Dividend yield | 1.90% | 2.00% | 2.20% |
Share-Based Compensation - Su67
Share-Based Compensation - Summarized Information of Stock Options Outstanding (Details) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Outstanding: | |
Aggregate intrinsic value | $ 55,789 |
Weighted average remaining contractual life | 6 years 6 months |
Exercisable: | |
Number of options (in shares) | shares | 954 |
Weighted average exercise price (in dollars per share) | $ / shares | $ 22.19 |
Aggregate intrinsic value | $ 29,134 |
Weighted average remaining contractual life | 4 years 8 months 12 days |
Share-Based Compensation - Su68
Share-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of Restricted Shares | |||
December 31, 2016 (in shares) | 74,000 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | (17,000) | ||
Forfeited (in shares) | 0 | ||
December 31, 2017 (in shares) | 57,000 | 74,000 | |
Weighted Average Grant-Date Fair Value | |||
December 31, 2016 (in dollars per share) | $ 32.09 | ||
Granted (in dollars per share) | 0 | $ 34.14 | $ 30.30 |
Vested (in dollars per share) | 31.41 | ||
Forfeited (in dollars per share) | 0 | ||
December 31, 2017 (in dollars per share) | $ 32.30 | $ 32.09 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock, Summary of Other Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average remaining vesting period (years) | 2 years 8 months 12 days | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 0 | ||
Weighted average grant-date fair value of restricted stock granted (in dollars per share) | $ 0 | $ 34.14 | $ 30.30 |
Total fair value of stock awards vested during period | $ 690 | $ 311 | $ 123 |
Weighted average remaining vesting period (years) | 2 years 6 months |
Share-Based Compensation - Re70
Share-Based Compensation - Restricted Stock Units (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Weighted Average Grant-Date Fair Value | |||
Weighted average remaining vesting period (years) | 2 years 8 months 12 days | ||
Restricted Stock Units (RSUs) | |||
Number of Restricted Shares | |||
December 31, 2016 (in shares) | 0 | ||
Granted (in shares) | 88,000 | 0 | 0 |
Vested (in shares) | 0 | ||
Forfeited (in shares) | 0 | ||
December 31, 2017 (in shares) | 88,000 | 0 | |
Weighted Average Grant-Date Fair Value | |||
December 31, 2016 (in dollars per share) | $ 0 | ||
Granted (in dollars per share) | 40.16 | ||
Vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 0 | ||
December 31, 2017 (in dollars per share) | $ 40.16 | $ 0 | |
Weighted average remaining vesting period (years) | 4 years 1 month |
Share-Based Compensation - Empl
Share-Based Compensation - Employee Stock Purchase Plan (Details) - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future grant (in shares) | 800 | ||
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Average weekly hours of work | 20 hours | ||
Service period | 2 years | ||
Stock options authorized to issue to employees (in shares) | 4,100 | ||
Shares available for future grant (in shares) | 2,300 | ||
Common shares purchased (in shares) | 54 | 53 | 59 |
Annual earnings withheld to purchase common stock | $ 21,250 | ||
Percent of IRS limitation | 85.00% | ||
Maximum fair value of common stock purchased | $ 25,000 |
Share-Based Compensation - Su72
Share-Based Compensation - Summary of ESPP Annual Offerings (Details) - Employee Stock Purchase Plan - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common shares purchased (in shares) | 54 | 53 | 59 |
Per common share purchase price (in dollars per share) | $ 33.29 | $ 29.64 | $ 26.29 |
Share-Based Compensation - Defe
Share-Based Compensation - Deferred Compensation Plan (Details) - SERP | 12 Months Ended |
Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of earned income on a pre-tax basis, deferred | 25.00% |
Percentage of match participants' deferrals | 25.00% |
Percentage of deferral in the form of common stock | 15.00% |
Full vest in matching contribution | 3 years |
Stock options authorized to issue (in shares) | 1,013,000 |
Common stock reserved for future issuance (in shares) | 400,000 |
Shares exercised and delivered (in shares) | 9,000 |
Stock options vested and outstanding (in shares) | 300,000 |
Share-Based Compensation - Su74
Share-Based Compensation - Summary of Information Of SERP (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
SERP expense | $ 5,985 | $ 4,252 | $ 3,541 |
SERP | |||
Defined Benefit Plan Disclosure [Line Items] | |||
SERP expense | $ 503 | $ 511 | $ 538 |
Treasury shares issued to fund SERP expense (in shares) | 9 | 13 | 15 |
SERP trust account balance at December 31 | $ 42,467 | $ 34,599 | $ 37,765 |
Unrealized gain (loss) recorded in SERP liability account | $ 4,534 | $ 1,495 | $ (62) |
Other Employee Benefit Plans (D
Other Employee Benefit Plans (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Maximum percentage of employee contribution | 15.00% |
Dividends - Quarterly Dividend
Dividends - Quarterly Dividend Payments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dividends [Abstract] | |||||||
Cash dividends paid per common share (in dollars per share) | $ 0.19000 | $ 0.18875 | $ 0.18750 | $ 0.18625 | |||
Total cash dividends paid | $ 13,987 | $ 13,883 | $ 13,750 | $ 13,624 | $ 55,244 | $ 53,342 | $ 51,375 |
Dividends - Additional Informat
Dividends - Additional Information (Details) - $ / shares | Jan. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Dividends [Abstract] | ||||||||||||
Cash dividends declared per common share (in shares) | $ 0.19125 | $ 0.19 | $ 0.18875 | $ 0.1875 | $ 0.18625 | $ 0.185 | $ 0.18375 | $ 0.1825 | $ 0.7575 | $ 0.7375 | $ 0.7175 | |
Subsequent Event | ||||||||||||
Dividends [Abstract] | ||||||||||||
Cash dividends declared per common share (in shares) | $ 0.19125 |
Dividends - Cash Dividends Per
Dividends - Cash Dividends Per Common Share (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Equity [Abstract] | |||||||||||
Cash dividends declared per common share (in shares) | $ 0.19125 | $ 0.19 | $ 0.18875 | $ 0.1875 | $ 0.18625 | $ 0.185 | $ 0.18375 | $ 0.1825 | $ 0.7575 | $ 0.7375 | $ 0.7175 |
Income Taxes - Summary of Provi
Income Taxes - Summary of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ 35,673 | $ 33,032 | $ 11,917 |
State | 7,179 | 6,958 | 2,173 |
Total | 42,852 | 39,990 | 14,090 |
Deferred: | |||
Federal | 2,924 | 2,163 | 13,646 |
State | (1,037) | 838 | 4,004 |
Total | 1,887 | 3,001 | 17,650 |
Tax provision | $ 44,739 | $ 42,991 | $ 31,740 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Federal and State Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 3,109 | $ 2,672 |
Deferred compensation | 6,601 | 8,532 |
Accrued insurance claims | 3,665 | 5,862 |
Non-deductible reserves | 567 | 1,257 |
Amortization of intangibles | 162 | 624 |
Other | 662 | 858 |
Deferred tax assets | 14,766 | 19,805 |
Deferred tax liabilities: | ||
Expensing of housekeeping supplies | (4,678) | (6,752) |
Depreciation of property and equipment | (1,745) | (2,568) |
Other | (845) | (663) |
Deferred tax liabilities | (7,268) | (9,983) |
Net deferred tax assets | $ 7,498 | $ 9,822 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of The Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
Income tax expense computed at statutory rate | $ 46,538 | $ 42,136 | $ 31,418 |
Increases (decreases) resulting from: | |||
State income taxes, net of federal tax benefit | 3,661 | 5,064 | 4,015 |
Federal jobs credits | (4,193) | (4,550) | (3,900) |
Tax exempt interest | (568) | (457) | (132) |
Other, net | (699) | 798 | 339 |
Tax provision | $ 44,739 | $ 42,991 | $ 31,740 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | Dec. 22, 2017 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Adjustment of deferred tax asset | $ 4,500,000 | |
Unrecognized tax benefits | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction, Due from (to) Related Party [Abstract] | |||
Fees paid to related party firm (less than) | $ 120 | $ 120 | $ 120 |
Percentage of fee paid to related party in relation to related party's total revenue (less than) | 5.00% | 5.00% | 5.00% |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Schedule
Segment Information - Schedule of Information of Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 1,866,131 | $ 1,562,662 | $ 1,436,849 | ||||||||
Income before income taxes | $ 34,678 | $ 32,930 | $ 33,078 | $ 32,279 | $ 30,529 | $ 30,571 | $ 29,683 | $ 29,604 | 132,965 | 120,387 | 89,764 |
Depreciation and amortization | 8,886 | 7,496 | 7,660 | ||||||||
Total assets | 676,003 | 528,446 | 676,003 | 528,446 | 480,949 | ||||||
Capital expenditures | 5,397 | 5,442 | 4,998 | ||||||||
Customer Concentration Risk | Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 327,500 | ||||||||||
Operating Segments | Housekeeping services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 979,610 | 957,148 | 909,709 | ||||||||
Income before income taxes | 95,505 | 90,756 | 84,471 | ||||||||
Depreciation and amortization | 6,547 | 6,535 | 6,488 | ||||||||
Total assets | 304,303 | 266,464 | 304,303 | 266,464 | 228,116 | ||||||
Capital expenditures | 4,287 | 4,612 | 3,586 | ||||||||
Operating Segments | Dietary services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 886,521 | 605,514 | 527,140 | ||||||||
Income before income taxes | 46,008 | 34,641 | 31,612 | ||||||||
Depreciation and amortization | 1,813 | 439 | 685 | ||||||||
Total assets | 242,874 | 127,187 | 242,874 | 127,187 | 104,797 | ||||||
Capital expenditures | 663 | 410 | 336 | ||||||||
Corporate and eliminations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 0 | 0 | 0 | ||||||||
Income before income taxes | (8,548) | (5,010) | (26,319) | ||||||||
Depreciation and amortization | 526 | 522 | 487 | ||||||||
Total assets | $ 128,826 | $ 134,795 | 128,826 | 134,795 | 148,036 | ||||||
Capital expenditures | $ 447 | $ 420 | $ 1,076 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||
Weighted average number of common shares outstanding - basic (in shares) | 73,355 | 72,754 | 71,826 |
Effect of dilutive securities (in shares) | 993 | 720 | 686 |
Weighted average number of common shares outstanding - diluted (in shares) | 74,348 | 73,474 | 72,512 |
Options outstanding to purchase common stock excluded from computation of diluted earnings per common share (in shares) | 1 | 500 | 900 |
Weighted average exercise price of options (in dollars per share) | $ 39.38 | $ 34.14 | $ 29.34 |
Contractual Obligations and O87
Contractual Obligations and Other Contingencies (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)financial_covenant | Jan. 02, 2018USD ($) | Dec. 31, 2016USD ($) | |
Short-term Debt [Line Items] | |||
Bank line of credit | $ 300,000,000 | ||
Borrowings under line of credit | $ 35,382,000 | $ 0 | |
Number of financial covenants | financial_covenant | 1 | ||
Change in bank line of credit | $ 77,600,000 | ||
Remaining borrowing capacity | 187,000,000 | ||
Standby Letter of Credit | |||
Short-term Debt [Line Items] | |||
Irrevocable standby letter of credit, outstanding | $ 77,600,000 | ||
Standby Letter of Credit | Subsequent Event | |||
Short-term Debt [Line Items] | |||
Irrevocable standby letter of credit, outstanding | $ 65,900,000 | ||
LIBOR | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Prime Rate or Overnight Bank Funding Rate | |||
Short-term Debt [Line Items] | |||
Basis spread on variable rate | 0.50% |
Accrued Insurance Claims (Detai
Accrued Insurance Claims (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Percent of liabilities | 30.70% |
Selected Quarterly Financial 89
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 499,410 | $ 491,355 | $ 470,876 | $ 404,490 | $ 398,565 | $ 392,734 | $ 386,556 | $ 384,807 | |||
Operating costs and expenses | 466,285 | 459,864 | 439,313 | 373,780 | 368,122 | 363,522 | 357,875 | 355,390 | |||
Income before income taxes | 34,678 | 32,930 | 33,078 | 32,279 | 30,529 | 30,571 | 29,683 | 29,604 | $ 132,965 | $ 120,387 | $ 89,764 |
Net income | $ 20,186 | $ 23,472 | $ 22,551 | $ 22,017 | $ 20,299 | $ 19,711 | $ 18,760 | $ 18,626 | $ 88,226 | $ 77,396 | $ 58,024 |
Basic earnings per common share (in dollars per share) | $ 0.27 | $ 0.32 | $ 0.31 | $ 0.30 | $ 0.28 | $ 0.27 | $ 0.26 | $ 0.26 | $ 1.20 | $ 1.06 | $ 0.81 |
Diluted earnings per common share (in dollars per share) | 0.27 | 0.31 | 0.30 | 0.30 | 0.28 | 0.27 | 0.26 | 0.26 | 1.19 | 1.05 | 0.80 |
Cash dividends declared per common share (in shares) | $ 0.19125 | $ 0.19 | $ 0.18875 | $ 0.1875 | $ 0.18625 | $ 0.185 | $ 0.18375 | $ 0.1825 | $ 0.7575 | $ 0.7375 | $ 0.7175 |
Schedule II - Valuation and Q90
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - Allowance For Doubtful Accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning Balance | $ 6,911 | $ 4,608 | $ 6,136 |
Additions | |||
Charged to Costs and Expenses | 6,250 | 4,629 | 4,335 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | 1,176 | 2,326 | 5,863 |
Ending Balance | $ 11,985 | $ 6,911 | $ 4,608 |