BENSALEM, PA — Healthcare Services Group, Inc. (NASDAQ: HCSG) announced on Monday that it will maintain uninterrupted services and payment flows with Genesis HealthCare facilities following Genesis’s Chapter 11 bankruptcy filing on July 9 in the Northern District of Texas.
HCSG currently serves 164 Genesis locations and expects no operational disruptions despite Genesis’s financial restructuring. As of the filing date, HCSG reported net accounts receivable from Genesis at $50 million and notes receivable at $14.4 million, after reserves. The company anticipates a non-cash charge of about $0.62 per share in the second quarter and an additional $0.03 to $0.04 per share charge in the third quarter as a result of Genesis’s filing.
HCSG Chief Executive Officer Ted Wahl emphasized that the bankruptcy decision stemmed from issues unique to Genesis, notably its legacy debt structure. “We believe the root causes of this action are specific to Genesis and its legacy debt structure,” Wahl stated. “While Genesis had taken steps to strengthen its financial position, they deemed this a necessary step to move forward as a stronger operator in this industry.”
Wahl underscored that broader industry conditions remain positive, citing favorable demographic trends, rising occupancy rates, improved workforce availability, and a stable reimbursement environment. “Overall industry fundamentals remain strong, highlighted by the multidecade demographic tailwind that is now beginning to work its way into the long-term and post-acute care system,” he said.
Despite the financial impact, HCSG reaffirmed its 2025 outlook, projecting mid-single-digit revenue growth and $60 million to $75 million in cash flow from operations, excluding changes in payroll accrual. Wahl expressed confidence in the company’s strategy, noting that HCSG remains well-positioned to accelerate growth and deliver sustainable, profitable results.
While Genesis’s bankruptcy poses immediate financial adjustments, HCSG’s steady operating foundation and strong market fundamentals reinforce its long-term resilience and growth trajectory.
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