Healthcare Services Group, Inc. (NASDAQ:HCSG) Q2 2023 Earnings Call Transcript

So long end around an answer to your question, I would remind you that the recruiting efforts in the management training program is executed locally. So, of course, as is always the case, we’re going to have variability as to some districts and regions being far ahead of the curve, and really being prepared for specific onboarding opportunities as to new business in the third and fourth quarters here. Whereas other geographies may still be struggling with labor market implications and staffing challenges. So perhaps they’re not quite as far along that continuum. But as an organization in total, Andy, very much having been focused on the back half of the year as the inflection point toward growth, we have been building and managing our management capacity toward that.

And we feel extremely confident that our management capacity aligns very well with the geographic opportunities that we’ve indicated as most likely to come on board here in the back half of the year.

Andy Wittmann: Great, that’s helpful. I guess, just as a follow up to that, I guess I just wanted to understand a little bit more on the confidence level of the second half revenue growth, where you gave this 420 to 430, obviously, that suggests sequential growth, which is good. I guess maybe the first question would be, does that 420 to 430 range is that already, is that business that’s already been started as we sit here today? Or are there other facilities that still need to transition here during the rest of the quarter unable to hit that target? And then I guess, maybe just more broadly, Ted, maybe if you could just comment on, sounds like the pipeline’s there, you made a comment that if and when the the customers decide to go. What needs to happen do you think for those customers to really pull the trigger? Do you’ve been having dialogue with? Do you feel like you’re — could add to the top line? What needs to happen to get them over the hump?

Ted Wahl : Yes, I think in terms of the confidence or conviction around the 420 to 430, it’s a mix, Andy, we obviously we wouldn’t have provided that range if we didn’t have a high degree of conviction that we were going to be able to deliver in that range. So it’s a combination of business that we’ve already have in hand that we started towards the end of Q2 and new business ads that we’ll have throughout the quarter. I guess, the bigger question you had about the pipeline, and what’s the gating factor to a customer pulling the trigger? It’s a collaboration. The pipeline’s robust, every customer group, every prospective customer has a different set of circumstances to it. In many cases, it’s just to piggyback off of Matt’s commentarial management development.

It’s a function of where do we have the depth? Where do we have the bench strength to be able to take on new business. We’ve always talked about the single greatest gating factor on growth is it the demand for the services or the amount of opportunities that are out there, it’s our own ability to hire, develop, train, and then successfully deploy management candidates that remains as true as ever today. I know, we haven’t talked about it in recent quarters and years as much as we had historically, but pivoting to growth mode here, that’ll be front and center and our own internal assessments and analysis and focus. And I imagine it’ll be a conversation we have quarter-to- quarter in this forum. So nothing necessarily as generally speaking as a catalyst to put a specific customer group over the hump, it’s just a process of prospective client by client assessment.

And where our management development efforts and capacity match up with the demand. That’s where we’re able to execute on the growth strategy.

Operator: The next question is from Brian Tanquilut with Jefferies.