Healthcare Services sees Q2 non-cash charge of roughly 20c from LaVie filing

Healthcare Services Group issued the following statement in response to LaVie Care Centers’ announcement that it had filed for Chapter 11 bankruptcy protection in the Northern District of Georgia. As a result of LaVie’s filing, the Company estimates a Q2 non-cash charge of approximately 20c per share. The company expects to continue providing services to LaVie and expects no impact on future revenue or earnings. Additionally, the Company anticipates no disruption in postpetition payments and reiterates its previously shared Q2 and 2024 adjusted cash flow expectations of $5M to $15M and $40M to $55M, respectively. Ted Wahl, Chief Executive Officer, stated, “The recent restructuring activity we’ve seen, including LaVie’s, is the result of conditions and events that occurred over the course of the past few years, as opposed to a reflection of the sector’s ‘current state.’ And while this restructuring will impact the second quarter’s reported results, longer term, it only further strengthens the financial health of our customer base. Overall industry fundamentals continue to trend positively, with workforce availability continuing to improve, occupancy at 79%, just under pre-pandemic levels, and CMS’s recently proposed 4.1% increase in Medicare rates for fiscal year 2025. Looking ahead, we are focused on executing on our strategic priorities to drive growth, manage costs, and collect what we bill, and remain confident in our ability to deliver long-term value to our shareholders.”