Healthcare Services Group, Inc. (NASDAQ:HCSG) Q3 2023 Earnings Conference Call October 25, 2023 8:30 AM ET

Company Participants

Ted Wahl - President and Chief Executive Officer

Matt McKee - Chief Communications Officer

Conference Call Participants

Sean Dodge - RBC Capital Markets

Andy Wittmann - Robert W. Baird

Jack Senft - William Blair

Operator

Good morning. My name is Rob, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Healthcare Services Group Third Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

The matters discussed on today's conference call include forward-looking statements about the business prospects of Healthcare Services Group, Inc. For Healthcare Services Group, Inc.'s most recent forward-looking statements notice, please refer to the press release issued this morning which can be found on our Web site at www.hcsg.com. Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties and important factors, including those discussed in the risk factors MD&A and other sections of the Annual Report on Form 10-K and Healthcare Services Group, Inc.'s other SEC filings. And as indicated our most recent forward-looking statements notice. Additionally, management will be discussing certain non-GAAP financial measures. A reconciliation of these items to US GAAP can be found in this morning's press release. Thank you.

Ted Wahl, President and CEO, you may begin your conference.

Ted Wahl

Thank you and good morning, everyone. Matt McKee and I appreciate you joining us today. We released our third quarter results this morning, and plan on filing our 10-Q by the end of the week. Today, in my opening remarks, I will first discuss our third quarter financial highlights and key accomplishments. Next, I will provide an update on recent client restructuring actions. I will then share our perspective on the latest industry trends and developments. And then finally, I will share our fourth quarter and 2024 outlook. I will then turn the call over to Matt to provide a more detailed discussion on the quarter, including our basis for GAAP to non-GAAP reporting.

So, with that overview, I'd like to now discuss our third quarter financial highlights and key accomplishments. For the three months ended September 30, 2023, we reported revenue of $411.4 million and adjusted revenue of $424 million, in line with our expectations of $420 million to $430 million. We reported net loss and diluted loss per share of $5.5 million and $0.07 per share, and adjusted net income and adjusted diluted earnings per share of $12.5 million and $0.17 per share, a 13.9% and 13.3% increase respectively over Q3 2022. We reported adjusted EBITDA of $23.3 million, a 10.2% increase over Q3 2022, and we reported cash flow from operations of $2.9 million, and adjusted cash flow from operations of $18 million, a 208.9% increase over Q3 2022.