Healthcare Services Group, Inc. (NASDAQ: HCSG) stock fell over 2% on 19th October 2018 (as on 10:27 AM GMT-4 ; Source: Google Finance) as the firm continued to face more challenging year-over-year comps this quarter and into the first half of next year. The company reported revenues for the third quarter up 3% to $507 million with decrease in Housekeeping & laundry revenues about $3 million sequentially to $242 million. Dining and nutrition grew at 9%, coming in at $264 million.
Net income for the quarter was $26.1 million, and earnings per share came in at $0.35 per share. Direct cost of services reported at 86.6%, and that remains above the target of 86% with the housekeeping & laundry segment margins at 11.3%. Dining and nutrition margins in at 6.2%. SG&A was reported at 7.2% for the quarter. There was about a $1.6 million impact from the change in deferred compensation investment accounts that are held for and by the management people. So, the actual SG&A was right around 6.9%. Investment income for the quarter was reported at $2 million. But again, after adjusting for that $1.6 million change in deferred comp, actual investment income was around $400,000. So, the effective tax rate for the quarter was 21%.
Coming to the balance sheet, the Group had $90 million of cash and marketable securities, current ratio of 3:1. Cash flow from operations for the quarter came in at $47 million, and that was favorably impacted by the $25 million increase in accrued payroll relative to last quarter. In addition, the Board of Directors declared a quarterly cash dividend of $0.19500 per common share, payable on December 28, 2018 to shareholders of record at the close of business on November 23, 2018. This represents the 62nd consecutive quarterly cash dividend payment, as well as the 61st consecutive increase since the initiation of quarterly cash dividend payments in 2003.