Healthcare Services sees 62c Q2 charge from Genesis bankruptcy

Healthcare Services (HCSG) Group issued a statement related to the Genesis HealthCare announcement that it had filed for Chapter 11 bankruptcy protection on July 9. Healthcare Services currently provides services to 164 Genesis facilities. Following the petition date, the company expects to continue its contractual relationship with those Genesis facilities without disruption in service or payments. The estimated accounts and notes receivable balances of Genesis, net of reserves, were $50M and $14.4M, respectively. As a result of the Genesis filing, Healthcare Services estimates a Q2 non-cash charge of 62c per share and Q3 non-cash charge of 3c-4c per share. Ted Wahl, Chief Executive Officer of Healthcare Services, stated, “We believe the root causes of this action are specific to Genesis and its legacy debt structure. 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.”