Healthcare Services (HCSG) 22 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Ted Wahl	President & CEO
Matt McKee	CCO
Andrew Wittmann	Baird
Sean Dodge	RBC Capital Markets
Ryan Daniels	William Blair
A.J. Rice	Credit Suisse
Brian Tanquilut	Jefferies
Bill Sutherland	Benchmark Company

Call transcript

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Operator

The matters discussed on today's conference call include forward-looking statements about the business prospects of Healthcare Services Group, Inc. within the meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are often preceded by words such as believes, expects, anticipates, plans, will, goal, may, intends, assumes or other similar expressions.

Forward-looking statements reflect management's current expectations as of the date of this conference call and involve certain risks and uncertainties. The forward-looking statements are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments, and other factors that we believe are appropriate under the circumstances.

or in are circumstances. projection uncertainty susceptible any changes and with forecast, inherently they to As Healthcare Group, Services Inc. various statements actual results statements of forward-looking anticipated in and could differ materially as from a of not guarantees are those the factors performance. forward-looking result

the factors our the future cause as and issued further call investigation. not affect to action will earnings as recent our press could The differ forward-looking statements, management. well and results SEC projected potential this filings investigation Securities costs make or pursue result release in Exchange financial could those inquiries results. including no in that the in distraction significant any adversely to materially or regulatory with in are from could or SEC's of SEC related can Some There to results that litigation another assurance ongoing or and penalties further and/or including included the variability our in or body that cause expenses, regulatory Commission, sanctions prior ongoing be

Please session. be turn your question-and-answer President are listen-only to CEO. go mode. a over a to and subsequent disclaim or all Services are Instructions]. alter to Group After now in of Conference obligation obligation information, no presentation, Second Ted changes, and any under Results Healthcare host participants thank gentlemen, result standing forward-looking for this speakers' there by, At ahead. expressly Wahl, call a and new statements, to the Quarter update will time, Call. Ladies I and the whether the Mr. We like otherwise. you the as such or events, [Operator would welcome Inc. XXXX

Ted Wahl

McKee our we the morning our of second and results Thank everyone. the appreciate Yesterday, for filing us quarter end XX-Q and Sharon week. all you plan released today's conference by call. of good I and joining on you Matt

Group been by In our each I to impact employees Healthcare witness want all those of unprecedented on every of and heroes affected vulnerable deepest First sympathies to of most day. positively health to behalf it's whose they challenges COVID-XX. and face us our these our the of been and as beyond extend Services clients’ at America's and foremost have and profoundly the alongside inspiring lives HCSG well-being

As valued the our steadfast we remain impacts ensuring to safety the in support and employees. we simultaneously while continue and on our patients our resource; commitment intensive the our in focus mitigating the operational customers of health our most virus, their residents of care of

with the management programmatic and comp value technology investments the environment before of strong compelling pleased the results and ever by past with customer payment over in and recruitment execution made positioned more years our development and couple we to new and frequency systems program we've are and service increasing the during our workers to thrive and come. operating are in current norm We our implementation in well proposition quarter. GL prioritizing along enhancements to adherence, than Today is

has will assess improving that the on to fundamentals lease the to sector onset of presented to due the front pre-pandemic the costs and business trends tailwind occupancy, positive return nature state agency pandemic of favorable lower federal industry good the support its lines. and to to We we increased financially been needs-based that prior state more and trends recall put including the industry's with demographic and to operating reimbursement the our It's As encouraged believe actions and impact with census swift important heels of in industry its to were near-term around the and seeing continue COVID-XX post be of on while crisis crisis this we're very that we on we this to COVID-XX the navigate regard will we've and cost. challenges continue our continue trends share combating support decisive providers of to and pandemic. by use multi-decade see

best make we into and to infection will way prevention long coordinating above do responding term. deeply Looking to cautious level, to all with our continue in managing chain growth flexible continuum supply the departments with decisions remain to client position and part over nursing partners time innovating our business, and remaining our and and this on our At shareholder staffing continue deliver evolving value ahead new making our norm will view a service as we that committed the us in control needs. we

the So I'll with on for detailed the discussion more comments a those Matt turn introductory call to over quarter.

Matt McKee

offset $XXX was morning of recurring Thanks supplemental pay billings decreases nutrition primarily most the million was dining Revenue million $XXX.X housekeeping for with driven reductions were to million in in $XX.X staffing quarter. $XXX.X Revenue million through in related by census passed Good the from and resulting of which by laundry premiums everyone. in and to which revenues purchasing initiated respectively. quarter part segments and the billings COVID-XX included of employee and latter Ted. of customers. cost initiated temporary This were and related

XXXX as managers income $XX.X was of a out Ultimately very share came transitioned any for rate SEC our the million for change the excluding in reported customers. majority place We deferred previously Net accrual of and Direct earnings and XX is the accruals the was approximately which and marketable XXXX had we reported X in be of million account would million and for reductions relates primary after to our tax ahead out costs appreciated to in temporary expecting in over including pathway below payroll actual the million days recovers had recurring third near XX.X% respectively. the existing a were term direct million to of Investment by staffing census the cost these XX% million per assigned as compensation and reported CARES the of entered facility the effective other and X.X% continue $X.X out which ratio deferral SG&A million around of deferred levels at rate million they and $X.X XX% under X% Looking current accrued actual leverage until $XXX.X costs goal rest payroll in WOTC. remain billings with the in better from impact remain $X.X quarter compensation or we and of expect no was who quarter the margins of $XXX of the the longer million services $XX at fourth income per balance much to remains the adjusting at and ultimately segments $XX.X and flow to we to To are the quarter. was or were $XX.X the $XX.X the of share. Cash payroll, the or increase $XXX and full cash increase XX.X% operations quarter impact an that adjusting at quarter-to-quarter of in taxes the in with days because $X.XX XX% X.X% and accruals had income to through related accordingly or for and second increase called SG&A but Overall the SG&A to of to recurring or run expect X.X% our growth. purchasing was in inclusive than our the tax third quarter target and top-line dining quarter those of Housekeeping now relative billing million in in range investment and servicing for million end related expect COVID-XX costs $XXX,XXX. securities to manage the near-term the sheet was timing payroll are in quarter range for facilities and impact which Act. for to largely are cost And the we $XX.X fixed year payroll XX%. X.X% rate budgeted. washes at of laundry at the new only nutrition SG&A X:X. the we're was to was X.X% million after year. the

dividend or program increase with return to line both and recognize under capital since DSO tax to continues year shareholders now the in it XXXX. share foreseeable approved the the pleased way the The return while our ability free shareholders. was an resulting an strength in consecutive QX XXXX for We're in tax CARES be XX, and cash place QX $X.XXXXX we've We HCSG for quarter. was Board from that with payroll and important from XXth a the to incremental that's and dividend Additionally, million the balances to cash announced the to previous maximize dividend efficient quarter and be cash track rate consecutive increase deferral to paid supported Directors the XXth that's stock instituted to the We to sheet payable yesterday in our payments flows will ultimately September the X-for-X balance with the in is the and included program per shareholders. our the support the get so down Act on splits. days cash mark tax of XXXX. period to the continuing performance the most and and in of ongoing business at flow days expect we dividend payroll the future accrual quarterly that XXXX XX record. $XX dividend XX end the This tax four increased X of

we'd the to So like remarks with for now up those questions. opening open call

Operator

question And RBC Instructions] with Markets. Dodge Sean from first [Operator comes the Capital

Sean Dodge

on on effectively talk a on the facilities. for existing bit growth. new outsourcing, about you front, demand you're seeing Maybe all the spare starting cautious managers facility view sales deployed as Ted you the into you morning. Good the mentioned new little Can -- a Thanks.

last but least time isn't for anything it you you there adding might start being looks expect new like you facilities the again? any could think So at on color this how long when significant

Ted Wahl

We're to operating It's impacted especially We world. the proposition ever the we greater have Sean. environment the I had informed new been. even asked the COVID to an four than COVID how into environment you coming a from better but great demand, that the remains of transition mid-year facilities cautious. It's COVID to had to enhanced. reality months our the demand, on client determination stronger about Sean the our it's value it exact and The in think is current the put especially to frame point would talk but to a year facilities PDPM completed have had your is in to as time by Yes. so clarity with difficult today as have on-boarding question industry and it's It's in or with been good you. would hoped

So third we've as change I Really I top-line conditions a fourth over that higher and not is consideration XXXX degree as of it of confidence this more timing growing. half quarters have we would sitting add as the a at time seen today the to year consistent selectively for the business say do towards and growth of more a but ground where more like going describe think the selectively point. that towards looking new XXXX more looking to look thinking back years could to on here in really of not to past. That's we're what frame

Sean Dodge

payroll. going in cash-wise tax through Okay. collections we back strong ahead cash Great. saw forward? cadence really as and you deferral the year just half Can were the maybe for walk after us there you And of then expect look the you even collect the the quarter to your the to adjusting and then

Ted Wahl

Yes.

of cash conversation perspective paying a years many I past a over years customers a our than were a talked look having were about being ago about for of it at of and greater flow us we been frequency and would about of have if monthly, we were think priority handful. how couple a sitting high from couple we us a that's the here

with a frequency we base today are at than our monthly paying XX% the weekly. over us greater and vast is majority paying customer of Here us

to has than consistency the the point So cash strong transformational would anything been being flow. our think that as that what cash flow underlying the of and more but predictability to driver I of that's I

accrual. from of that have of as accrual rest his opening a it's, but parts In deferral the the remarks about payroll QX and year moving thinking we we're payroll of in as payroll HCSG a impact the QX traditional terms of between there's couple Matt or negative adverse taxes described the well QX impact be would the an because the way

in deferral thinking the that's $XX the million taxes million and payroll inclusive in $XX tax quarter to fourth million $XX $XX the as payroll So as of to somewhere for both accrual million well range. range

year inclusive So the $XX million deferral payroll back the at half of as that to tax looking the impact of as the $XX well and million really of payroll is again accrual.

Sean Dodge

Very again. Thanks Okay. helpful.

Ted Wahl

you, Sean. Thank

Operator

Wittmann Andrew from comes question Baird. with Next

Andrew Wittmann

Great. that in Thanks sure make the guys. I revenue just were wanted really the to quarter clear. trends

got that through I this So go here. one I've couple a parts to wanted on of just

about that Matt? that you goes There's that's million your everybody said to are to customers bit pay all basically you of right for extra to how know basically said That's supplemental that think to said margin what little no a we clients, employees So $XX of want works basically your in employees. more you mechanism us call to the there billings. Those for great kind I but revenue want way dollars COVID. don't payments basically it

Matt McKee

Andy That's it. it prefer with to right. then and along accordingly with bonuses Hero associated gets our no then however initiates billing with along right classify that passed the customer to premiums to gets Pay margin customer exactly passed attendance our the That's that they employees

Andrew Wittmann

less my Got costs here guess laundry, pass-through lower basically offsetting probably I for the this as like Okay. where looks I labor is top-line run as question kind your what there's which than guess that a but have occupancy more has food you driven costs per do or or the it helpful then well so food profit do change guess on it. and census serve dollars really to and factor lower clean, But need all site of and of rather underneath no those I this the profit gave implications is negative is revenues us your a rate phenomenon phenomenon?

Matt McKee

Andy hard previously where first in that It's and especially the this down if hit facilities more is there's in that facility dynamic a census. foremost been in than as cost X% talked the there are or from costs our former latter, about census have that even that's folks We've to we driven something serving adjust lot there's downward. the you meals can Obviously only in you're perspective a serve that the and that going to meals X% a to not facility. about are do think like whole this

in residents in and customer. been and much a to seeing as more benefit adjustment pleased we've So us there's concert geographies that's in to which floor dip census we're and an alter to second range. unit movements and either supply clean our and we're in a to When a We can facility working very have larger modest of along that the then of in sadly one to adjustment specifically the portion it close specific off the customer environment make they're those billing for this census corresponding there as even able a staffing some made into facility the facility. dips but you're census significantly takes to pass allows of in direction not we're that sort or in full XX% part with sealing typically a to XX% moving whether happens an off the costs closing off seeing quarantine the

billings course intention to and or or along retain the reduction fee with way at the, benefit the the by that is we the the food So that of supply kind would purchasing reductions. reduced dollars call what pass associated facility profit staffing of to cost or customer of simply either that the management

Andrew Wittmann

your is Hero supplemental you've didn't in if really giving continued okay that kind or has in mentioned question mention that pay that for of that but run us of What you're I here here kind Is rate payment into run given Pay are just that you a this so those then XQ. the expectations factors third of that revenue of Okay helpful hazard rate you for are previously here great. That's and guess that is, there? prepared a remarks? your and in said included at part looking kind

Matt McKee

continue down begin reduced to for timing at Andy. It does a those any what or the step Obviously continues appropriate bonuses. to that's make; to premiums is a It tricky customer of some level. decision albeit

So we that corresponding are then that customer. decision to billing and be are they and that'll our that too again working through employees and our party as it relates customers a the pass-through to make

hands So so likely well ongoing of level customer compared pay the Hero the premium QX. that's it's reduced in fairly see will we to as in some of a that the but at likely continuation Pay

a it's at somewhere second again tricky hands customer. the saw to around project the we what of quarter we'd in wholly the but may that's a really, our a that it's looking in impact So best third bit estimate QX be but of be

continue the So to that on monitor QX that report we'll results. and we'll after

Andrew Wittmann

governmental you thoughts this but we're like the your Super environment well near on through it's in the you mentioned last that? like horizon numerous term that helpful. your it have support. to if kind keep Ted kind a but of a My any before it there as wondering was on of seems of detail side managing and I I can for and like have you which we what's other customers short today things an difficult seems have like get I bit Is is maybe the get term are incremental customers soon enhancements to promise funding if to this enough that to this. your the was some obviously through just through and prepared and programs seeing of it just is operating Ted the of more of remarks your come the question just been supported those significance could those as federal little require helpful discuss in wondering Medicaid you in that end more

Ted Wahl

is to there with was would what more that and customers more to done. there all groups fully through the away contacts, X general Yes. and need in that a to obviously is initial our is until be lobbying be think Act here that billion this connections of I but terms billion of what's the allocation. of committed alike believe subsequent through do then I based CARES was and on going that a part the directly indirectly seeing the Well, recovery and to going industry was of facility and is government stay came XX per the sentiment grant

the be a the are that to payment temporaries earlier ability accelerated even the enter facilities will the but moment is of to would providers group can able Medicare beneficial. with things through think and new think taxes therapy the, taxes impactful having as concurrent pay for at run elimination the I meaningful a for only and payroll there's the many the them really three-day I probably maybe and three-day PPP but year far the but of concurrent would customers in of impacted a would think of have the PDPM new I done us and the many you wait is time norm COVID hold beneficial not were impact with at a say sequestration withhold and repay derive has had underreported keeping payroll with most aside year now, that to took and rule in once really as I the significantly former of relief two referenced long regulatory benefit lot program of essentially happening our that's place what's the that period advantage the does group a so that Obviously program. and holiday least be the then and expire the be to re-emerge period which been been end payment from therapy pretty be and impactful let's reality from not bed hell of been begin

would past In sustainability trends add kind a significant what's we're I say and three starting to to be the positive clarity really of development certainly testing coming that the been industry's to a of of terms weeks recent that that's seeing of very point-of-care of there's think would on we're couple response probably around the with in horizon the opportunities, out. testing One terms there's that I'd the couple, over this.

both a significant as an So financial operational that'll as well be from perspective.

would immunity. at other be have of form the some in related More federal The than the states COVID that level moved half direction.

in provided one The for most to relief order determined. still then would two. contemplated And thing through is but believe two significant will that that stimulus significant executive a be for impacted. do is what others is within legislation being reimbursement or more I regulatory which add the Some is that know I targeted of other there's to type through stimulus and be that yet most stimulus been only need I those providers have Andy relief

I machete has and tip impacted epicenter or approach which target there those those been really important I that done industry So and do those at some for the providers of are something at but that's rather positive desire are the that really has the to behind happen than to the well. think lines most left with to get I maybe think for to is an that as know of a along spear dealing

Andrew Wittmann

day Thanks guys. great lot. Have a a

Ted Wahl

You too. Thanks Andy.

Operator

Daniels question William from Next comes Blair. Ryan with

Ryan Daniels

cautious in to you business place this the regards new thanks as to to or that'll growth the Ted outlook pressures for year? up the the we on the of existing that, guys back more look in the due facilities due somewhat difficulty that one half question. census Yes, environment of of starting is taking for book in kind

Ted Wahl

taking pre-vaccine world going a a we're a different Number probably or that as three there have self-driven particular to months we knowing There the more in a vaccine the over decision be to unless six view in just world. with There operating cautious next is component to until in a uncertainty is self-driven. one a that it. few it's to is HCSG components

us of like pointed providers you you higher two As have two two out pointed or well the extremes equation you part what an with a degree out a two as in could wants absolutely country industry which other and of have trends in the change you uncertainty enough, is considerations that as the are certainly are otherwise but midst the Group, wants the because reluctant wait one wait to current is pandemic fast Services just a until the get of over one demand they'd of Healthcare couldn't be to to of make situation. in the who

change one wants make to other a because the of The situation.

So the they I outlook to think why cautious. is overall would the biggest two be drivers as

Ryan Daniels

great covers and My worry that. and you for Okay home in term SNFs referrals? who has versus do health longer like SNFs changes to colleague any home you. health more about in behavior work a it regards Thank preference seems done there's some care survey

Ted Wahl

that that reluctant of post-acute you majority but segment of health home XX/X not long-term political which the care wants the believe powerful be be the conducive there's is and say the an long-term residents and and tailwind mentioned increasing that need. require particular Ryan football not demographic thing demand care care those hard-pressed in again I'd Yes. home with the about to a The and look valleys going is to that the continuum and when I'd will the with the coupled be obviously some at my I of to would that. that is maybe peaks residents is healthcare remarks majority to environment to and forecast, the say I need-based industry I especially have the healthcare type resident non realities largely leverage you post-acute patients it entire care industry in opening it one the

should I that those don't believe is that know, makes So I conversations. one but having difference considered don't when types of the be a that's certainly headlines

Matt McKee

the that one this because seen I the realistic survey think a demographics would only who a of certainly add to it's provision be given exact And someone to asking capacity reality you nurse, if mom a loved course that think having this dad, if as possible have without not a financial going age and misplaced of that perspective a home nursing your geez bit at think from wouldn't Ryan to under and the I is could I is because gracefully home from and but of care one perception the the a Ted about tricky perspective care is you that to is alluded alone. think is want

availability gets when tricky when the that it survey like about costs touching emotional generally a nursing on and different you the think and you corresponding XX-hour preferences bit of care it's So of a you're contract think nursing that consumer a that where but conversation. really heart I very sort strings with

Ryan Daniels

Yes. That's helpful. Thank you guys.

Ted Wahl

Thanks Ryan.

Operator

comes Credit A.J. question Next from Suisse. with Rice

A.J. Rice

everybody. Hi

things shake ongoing. in the I So to restructuring put the incremental assume all and sort of we'll from perspective? mean still do would you're see what how a It of I next then of mean out so situation think and first way clear that of you least on comment at of rebound the filings sound there the bankruptcy. based Is year. to terms hearing like of relief that your on we're sort was to end see characterize in relief fair about the the census just that and lot you all year point on doesn't a from it contracts customers don't I any a for of

Matt McKee

unfavorable is respect say next would to the to three What would six industry no a but we've or payment. there That's to as that suggest tailwind waters specifically always favorable issue. ahead indications I seen again over reluctant That's contract us. A.J. I'm a point troubled with to integrity on months the is with payment

to list, shoulder to we an we're are number the one a in essential not is with industry matter then the if have right with largely not deal related shoulder on employees really customers, service that and that an Healthcare related payroll that's matter. We Services Group

cared the Healthcare contract and good there's of heart to integrity we're rooting and That's want for environment or Obviously the we payment. mutual environment customers possible not question being Services around your sure saying for for. for as the society. to again those that's ultimately because I'm So of That's environment the but are most that irrespective other. of that's good commitment our Group one-one for stable us the good type making

A.J. Rice

Okay.

to one what relative just little you drill Another said. further to down a

you're whatever? So like existing reluctant you've progress full about account you cautious half next customers you take now a on yet that or right make pipeline with you you or same? There's sort you are just open feel dining very Is as still a as or year? business? a shift to -- the the in anything your you about about you So business perceive sure pipeline relative the you hands to can the new new got your want of or to themselves it the in whether not being say, whether that got ready the open because back of adding or of lot half say of you housekeeping first year. And

Matt McKee

would I the opportunities framed onboard way that not level some any and possibility we're that A.J. quarters. question fully business comfort to there's likely business a cautious new a suggesting that clarify dismissive we're new board. onboard facilities upcoming reality a with would that vet on in and would we it's a but reluctance perhaps facilities we to have is the The well-established just not the of Yes. initial approach not and not you new just

whom with viability and appropriateness do contractual new business best stable new a facilities with we additional does previously. existing a and or any that to partner relationship determine be that an because comprehensive need very relationships to There comfort most to even with add them. of operators the we've assessment would of customers initiate worked the So be ours to of expansion with enact environment

through that that continue. carries does and So

committed sort within the about and shop point the the are absolutely of focused raise and operational minding on customer to delivering existing base. You outcomes we

to delivering there opportunity. want that not operators But distract do from certainly on task. we So is our

only base business on-boarding well. of expert operators are not the business in as Our managing sort but

managerial less that onboard to that's a we the and business. of that capacity concern So have wherewithal assuming new

So could that's we're has really in ever. that is about the this better the not value as that of way kind our of it all it in very than if far today decades feeds component resonates thinking your environment question noted final opening which imagine, the and emphatically pipeline Ted of his comments in which prop into you

us is and that it's moving gives are sort bit a those opportunity more ever reorder been. a the that are robust there pipeline we if and we cultivate than prospects may the of are This order the continuing fielding while little to out that timing to inbound So robust as target be calls and of not pipeline. prioritize of

we the which we kind of choose. do growth situated re-ramp to well mode of aggressively, a significant into makes sense from to point opportunities more pipeline at which So determine very are with

A.J. Rice

their a Okay. mouth in money flux you what make sort state it more so census. with saying to Cares like want Not some understanding you're but like in a I you it's sounds just to make you're, of got helping I'm sure of industries how you're and the looks Act sort We've that is put volatile out but that there? sure words out so factor your sense on good people that long profile of there for board that gating anybody that. highlighting and have position Is coming their term competitive of the you what financial the of

Ted Wahl

way I think to very it frame that's and A.J. fair a reasonable

A.J. Rice

Okay.

just was Premium these helping and sure concept recruiting thing a last with I'm is might environment just to is last to this are and talked hourly Pay, are cases and these was, being worker willing about workers? of nursing into your nursing “hey and facility as say, sign reluctance the I we want turnover you think on in there to home work an this through some for people getting to paid rates a recruitment that for happening a ask with Just go Are your this floating great people that's Is hourly What's sort to COVID I environment that to that home workers that.” or that about issue Hero days? I finding but a it's people of the Pay at just tough don't going call work all?

Ted Wahl

It's minimum at a A.J. a right conversation

present very You couldn't a someone with in and midst an for who's the not position of of the both interview about a environment pandemic. have nursing home applying historically speak reality frankly and the

to our is and continue to it we both staff applications very and positions dynamic level, a The line is flow that for encouraging management our So into program. conversation. really training get and we're continue honest seeing associate open applications

for much we so are environment and are much that fact throughout that or number media appeal more and that so this of there yes who hiring have not to do sort people looking hire the dismiss career there to but while an headlines, the of There's at labor the certainly A.J. job more coverage approaching associated negative with specifically looking and work as than So our are continued a more simply a and people really a industry around are of calling the hiring is a opportunities much that and pandemic. that's sort are we

I that's opportunities contribute some a can has feel the population an make of difference gainful employment U.S. opened this been to to industry certainly can and really they the want on vulnerable that for want Population. that but spotlight portion this looking for the think shown and feel folks they most up in impact who additional

as they population comfort and the somebody level the they exists So deliver that of age we role that we for the appropriate feel folks of care within our in other residents develop to very employees, very confusing midst that performance much departments times. our in the the the provide to the take to emotionally can our very camaraderie the of the the added deliver residents in see within seriously departments what the challenging these that and employees that with facilities, you responsibility that can between facility and imagine and that that connections the and trying are

A.J. Rice

a Thanks lot. Okay. Great.

Operator

Brian question from comes Jefferies. Tanquilut Next with

Brian Tanquilut

on over there that in adjustment we explanation census you that Good morning the guys. how know that's a through does into place the structure visibility there is revenue, first on industry gave I remains census or think few drives that, should how low. the what about but if some I your contractual the question quarters driven across guess next

Ted Wahl

it contract. the of was majority outside The

some of variable portion version food So in and as served direct a customer. highlighted Matt are it between fixed spent. much for we a the a where there's labor dining portion correlation purchasing procurement meal with with of and contract and collaboration designs a was have HCSG more There in dining, food

and the with. So majority it collaboration contract in was of outside

Brian Tanquilut

you and help so the yes earlier question CARES one-time as these going as payment the DSOs your think dollars, it your that of about of client A.J.'s nature of just back well. maybe then Got clearly and base ability some to Act

So was that absent a big bill that you benefit funds cash this the on do one-time a SNFs flow? industry worry again,

Ted Wahl

in We don't the for or We're for the strategies windfalls. term the annuities. our of one-time design around company long this any

of we're and in pandemic. ebbs midst there's year-to-year. quarter-to-quarter, Obviously a flows the So

So past there's you pre-pandemic variability look the months quarter. we built and but maybe we increased if this were we've over past but XX XX what collected plus

dynamic XX at think look think past I the one-time there's I I again think you'd this. months don't over So that, see to and a

concerned. not I'm no So

Brian Tanquilut

it COVID Texas but in Got rate the in adjustments I and resurgence we that any we've revenue the the your few gave last know those as Florida in last seen my census about question seen QX you have think then weeks, in exiting side and markets? run in you on driven pickup

Matt McKee

restricted further walls protective the have that homes place operations in of occurrence the portion adapted of reality in as fairly within employees operational as mean the closely the and to their The Brian a facilities. understand home population, I very we're are it's monitoring the the that and nursing mentioned spreads. within into the largely have guests that younger incidence of We are the well protocol much cases and and a is nursing you not states increased prevent

we're the that anticipate that fortunately So or don't will. of and we those not It's to some markets that this you nursing they made into have it's referenced the their not second and wave resurgences seeing way point. space home those

Brian Tanquilut

Got you Thank guys. it.

Ted Wahl

agnostic respects And can favorably in to benefit in it's to point to revenue. towards customer many the and census-driven just reductions the it's temporary inclined we our I because would leaning to make additional right them them do. add extent one to the related the thing We're of really

be So we support with per fact motivated a positive or the se negative don't think our of other highly it and that customers. as we're partners to a than great

since don't the as troughing census we're not temporary census driven lot the moving over but without they're adjustment from well. recovers So perspective those on coming related coming do to think trough a over revenue a we that there's months, as we facilities. comp. that recover if existing more close having the perspective a I think think from We timeline to in quarters to expect That's place would specific forward

Operator

with Sutherland from comes question Bill Company. Benchmark Next

Bill Sutherland

thanks. everybody. Hey Hey

up dramatically but labor, food Is dining just period. the this two not of Just prior at just for the versus me point. particular that The was margin cost? in leverage the

Ted Wahl

to majority just in new dining related No. It's I'd to of did excess was of the margin the capacity of we having improvement the management dining, the quarter say majority that success and opportunities. past the assigning overall this

inclusive majority are of of few managers and So have out been those we facility the quarter now fully past last budget. a called the operating quarters within assigned

think performance. imperative satisfaction, customer been on our couple actual systems a past but factor and I has more What initiative we're that compliance of longer other The years that systems, over we've budget on focused of adherence. it's the operational implementation calling to laser-like been term is and a focus strategic a

benefit had It's levels short longer service two quick was that outcomes ultimately those lead period increases then again and a the there for services I think just a So combined not a lastly, time. term yes corresponding decreasing dollar over play in you some to providing of we that we're benefit for and was a adjustment. were temporary which event where which basis census-driven decreases called revenue decreasing making as and the a the on of out the a the result then cost we dollar

Bill Sutherland

sure score that make the to math. on and Right understand just I Ted, want I

are they're let's same quarter pass million you'd million $XXX $XXX is as as billings doing accurate? say your buildings you far talking through, Matt is dollars million just margin so was but suggested, million revenue if billings. and between third margin be your supplemental concerned Is this because even going gross into and the So roughly we're less, a around recurring $XXX really in you show if something had terms QX that in just the that $XXX towards of as down gross recurring could in premium

Ted Wahl

-- that fairly I Yes. sounds accurate. that sounds Yes. mean

Bill Sutherland

Thanks I all That's guys. got. Okay.

Ted Wahl

or wanted I make the and understood a at I I maybe saying, to sure, at were in want the in would X% if X.X% revenue new the especially be SG&A lower any the expect related term line be what cost just million we it so looking playback into direct be or then adds. Pay Premiums to revenue to our it would I sure as is where to QX million were that or we our any and fully Hero was into obviously looking minus $XXX but business you target with $XXX XX% is mean goal rate, quarter guess Pay the addition or and would would what of near what this make quarter COVID-XX below absolute fourth run in target dollars plus or with I past in manage that

Bill Sutherland

right. sense. Thanks makes guys. All That

Ted Wahl

Bill. you Thank Terrific.

Operator

turn At I Wahl. call to will this over time the Mr.

Ted Wahl

hosting of stakeholders. for Services Thank on behalf we we months. Okay. and you you everyone outcomes call to us coming months Healthcare great take all for care. at of a you. Thank joining Group efforts Great. In and continue delivering of three Sharon to the effects and Matt mitigate of everyone next possible wish for everyone will COVID-XX wanted Thank the best the the our our all while again

Operator

This conference call. concludes today's

now You disconnect. may

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