HEALTHCARE SERVICES GROUP INCHCSG
HEALTHCARE SERVICES GROUP INC Segments Disclosure
Note 13 — Segment Information
The Company manages and evaluates its operations in two reportable segments: Environmental Services (housekeeping, laundry, linen and other services) and Dietary (dietary department services). Although both segments serve a similar customer base and share many operational similarities, they are managed separately due to distinct differences in the type of services provided, as well as the specialized expertise required of the professional management personnel responsible for delivering each segment’s services. Such services are rendered pursuant to discrete contracts, specific to each reportable segment.
The Chief Operating Decision Maker (“CODM”) for both segments for each of the years ended December 31, 2025, 2024, and 2023 was Theodore Wahl, the Company’s President and Chief Executive Officer. The Company’s CODM does not review assets by segment to assess segment performance or allocate resources, nor is such information provided to the CODM. Accordingly, the Company does not present assets by segment.
The Company’s Significant Segment Expenses for each segment include direct labor costs and segment-based management expenses (collectively, “labor and labor-related”), food, chemicals and supplies, bad debt expense, and depreciation & amortization, as these are specific costs regularly provided to the CODM and used to evaluate segment performance. Other segment items include expenses recorded within costs of services provided which are not regularly provided to the CODM. The CODM evaluates segment profit each period against historical results, factoring in macroeconomic factors such as the cost of labor and supplies, to assess segment performance.
The Company’s accounting policies for the segments are generally the same as described in the Company’s significant accounting policies. The Company does not allocate Corporate expenses, gains (losses) on deferred compensation plan investments, other (income) expense, net, interest expense and income tax provision to segments; such amounts are added to combined segment profit and reconciled to the Company’s consolidated income before income taxes. All revenues and net income are earned in the United States.
The following tables provide profit information disaggregated by the Company’s reportable segments for each of the years ended December 31, 2025, 2024, and 2023:
| Year Ended December 31, 2025 | ||||||||||||||||||||
| EVS | Dietary | Total | ||||||||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||||||
| Revenues | $ | 824,681 | $ | 1,012,492 | $ | 1,837,173 | ||||||||||||||
| Significant Segment Expenses | ||||||||||||||||||||
Labor and labor-related1 | 645,335 | 595,419 | ||||||||||||||||||
| Food, chemicals and supplies | 59,150 | 312,728 | ||||||||||||||||||
| Bad debt expense | 29,096 | 53,983 | ||||||||||||||||||
| Depreciation and amortization expense | 4,467 | 3,716 | ||||||||||||||||||
Other segment items2 | 14,382 | 21,626 | ||||||||||||||||||
| Segment profit | $ | 72,251 | $ | 25,020 | $ | 97,271 | ||||||||||||||
| Segment margin | 8.8 | % | 2.5 | % | ||||||||||||||||
| Unallocated expenses (income) | ||||||||||||||||||||
ERC refunds3 | $ | (34,239) | ||||||||||||||||||
Corporate expenses4 | 75,710 | |||||||||||||||||||
| Gain on deferred compensation plan investments | 7,261 | |||||||||||||||||||
| Other (income), net | (20,907) | |||||||||||||||||||
| Interest expense | 1,580 | |||||||||||||||||||
| Income before income taxes | $ | 67,866 | ||||||||||||||||||
1.Includes direct labor costs, field management costs (including certain costs included in selling, general and administrative expenses), employer taxes, workers' compensation and general liability insurance.
2.Includes expenses for technology, employment advertising, travel & entertainment, professional services and various other less significant expense items.
3.ERC refunds were excluded from segment results for each segment as the credits were related to services provided in previous years and not indicative of current period segment performance, as reviewed by the CODM.
4.Represents selling, general and administrative expenses less the amounts allocated to segments for labor and benefits.
| Year Ended December 31, 2024 | ||||||||||||||||||||
| EVS | Dietary | Total | ||||||||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||||||
| Revenues | $ | 765,368 | $ | 950,314 | $ | 1,715,682 | ||||||||||||||
| Significant Segment Expenses | ||||||||||||||||||||
Labor and labor-related1 | 600,198 | 537,446 | ||||||||||||||||||
| Food, chemicals and supplies | 56,504 | 308,859 | ||||||||||||||||||
| Bad debt expense | 14,101 | 32,659 | ||||||||||||||||||
| Depreciation and amortization expense | 3,701 | 2,856 | ||||||||||||||||||
Other segment items2 | 15,454 | 22,473 | ||||||||||||||||||
| Segment profit | $ | 75,410 | $ | 46,021 | $ | 121,431 | ||||||||||||||
| Segment margin | 9.9 | % | 4.8 | % | ||||||||||||||||
| Unallocated expenses (income) | ||||||||||||||||||||
Corporate expenses3 | $ | 68,160 | ||||||||||||||||||
| Gain on deferred compensation plan investments | 8,241 | |||||||||||||||||||
| Other (income), net | (14,349) | |||||||||||||||||||
| Interest expense | 6,438 | |||||||||||||||||||
| Income before income taxes | $ | 52,941 | ||||||||||||||||||
1.Includes direct labor costs, field management costs (including certain costs included in selling, general and administrative expenses), employer taxes, workers' compensation and general liability insurance.
2.Includes expenses for technology, employment advertising, travel & entertainment, professional services and various other less significant expense items.
3.Represents selling, general and administrative expenses less the amounts allocated to segments for labor and benefits.
| Year Ended December 31, 2023 | ||||||||||||||||||||
| EVS | Dietary | Total | ||||||||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||||||
| Revenues | $ | 766,651 | $ | 904,738 | $ | 1,671,389 | ||||||||||||||
| Significant Segment Expenses | ||||||||||||||||||||
Labor and labor-related1 | 599,881 | 522,052 | ||||||||||||||||||
| Food, chemicals and supplies | 58,627 | 294,690 | ||||||||||||||||||
| Bad debt expense | 17,557 | 18,046 | ||||||||||||||||||
| Depreciation and amortization | 3,664 | 3,779 | ||||||||||||||||||
Other segment items2 | 14,907 | 21,446 | ||||||||||||||||||
| Segment profit | $ | 72,015 | $ | 44,725 | $ | 116,740 | ||||||||||||||
| Segment margin | 9.4 | % | 4.9 | % | ||||||||||||||||
| Unallocated expenses (income) | ||||||||||||||||||||
Corporate expenses3 | $ | 62,082 | ||||||||||||||||||
| Gain on deferred compensation plan investments | 6,684 | |||||||||||||||||||
| Other (income), net | (12,938) | |||||||||||||||||||
| Interest expense | 7,856 | |||||||||||||||||||
| Income before income taxes | $ | 53,056 | ||||||||||||||||||
1.Includes direct labor costs, field management costs (including certain costs included in selling, general and administrative expenses), employer taxes, workers' compensation and general liability insurance.
2.Includes expenses for technology, employment advertising, travel & entertainment, professional services and various other less significant expense items.
3.Represents selling, general and administrative expenses less the amounts allocated to segments for labor and benefits.
The following table provides capital expenditures disaggregated by the Company’s reportable segments for each of the years ended December 31, 2025, 2024, and 2023:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||
| EVS | $ | 4,526 | $ | 5,166 | $ | 4,684 | ||||||||||||||
| Dietary | 879 | 936 | 494 | |||||||||||||||||
| Corporate overhead | 413 | 234 | 228 | |||||||||||||||||
| Consolidated | $ | 5,818 | $ | 6,336 | $ | 5,406 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Feb 23, 2018 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.