Duncan-Williams Comments On Healthcare Services Group 1Q11 Earnings Release

According to Duncan-Williams, Healthcare Services Group HCSG reported Q1:11 revenue and EPS of $208 million and $0.12, in-line with our revenue estimate of $207 million and $0.03 below our EPS estimate of $0.15. Duncan-Williams reported that this represents 13% revenue growth and 9% EPS growth compared to the same period last year. “Part of the miss in the quarter was due to an increase in bad debt expense and associated costs from a client in chapter 11 bankruptcy that was forced to declare chapter 7 bankruptcy. The loss of the customer increased COGS by approximately $800k in the quarter and resulted in an additional cost of approximately $300k in legal and accounting expenses in the quarter.” Healthcare Services Group closed yesterday at $17.53.