HCSG - Healthcare Services GAAP EPS of $0.22 beats by $0.11 revenue of $424.02M beats by $4.28M

• Healthcare Services press release ( NASDAQ: HCSG ): Q4 GAAP EPS of $0.22 beats by $0.11 .
• Revenue of $424.02M (+0.8% Y/Y) beats by $4.28M .
• Housekeeping & laundry and dining & nutrition segment margins were 8.7% and 4.3%, respectively.
• Direct cost of services was reported at $366.8 million, or 86.5%. Direct cost included a $9.8 million benefit related to favorable workers’ compensation loss development trends offset, in part, by an $8.6 million increase in AR reserves.
• Selling, general and administrative (“SG&A”) was reported at $39.5 million; after adjusting for the $2.1 million increase in deferred compensation, actual SG&A was $37.4 million, or 8.8%.
• The effective tax rate was 19.4% for the fourth quarter and 23.2% for full year 2022. The Company expects a 2023 tax rate of 24% to 26%.
• Cash flow from operations for the quarter was $22.9 million and was impacted by a $3.1 million decrease in accrued payroll, including the impact of the second half, or $24.4 million, of the deferred FICA payment. DSO for the quarter was 72 days.

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