UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)


			☑						ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025


			☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number: 0-12015

HEALTHCARE SERVICES GROUP, INC.

(Exact name of registrant as specified in its charter)


Pennsylvania						23-2018365
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

3220 Tillman Drive, Suite 300, Bensalem, PA						19020
(Address of principal executive offices)						(Zip Code)

Registrant’s telephone number, including area code:

(215) 639-4274

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	HCSG	Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of the voting stock (Common Stock, $0.01 par value) held by non-affiliates of the registrant as of the close of business on June 30, ~~2024~~2025 was approximately $~~620~~897 million based on the closing sale price of the Common Stock on the Nasdaq Global Select Market on that date. The determination of affiliate status is not a determination for any other purpose. The registrant does not have any non-voting common equity authorized or outstanding.

Indicate the number of shares outstanding of each of the registrant’s classes of Common Stock (Common Stock, $0.01 par value) as of the latest practicable date (February 1211, ~~2025~~2026). 7370,~~487~~267,~~743~~582

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement for the registrant’s ~~2025~~2026 Annual Meeting of Shareholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended December 31, ~~2024~~2025, are incorporated by reference in Part III hereof. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part hereof.

Healthcare Services Group, Inc.

Annual Report on Form 10-K

For the Fiscal Year Ended December 31, 2024

TABLE OF CONTENTS

PART I		Page
Item 1.	Business	1
Item 1A.	Risk Factors	6
Item 1B.	Unresolved Staff Comments	1314
Item 1C.	Cybersecurity	14
Item 2.	Properties	15
Item 3.	Legal Proceedings	15
Item 4.	Mine Safety Disclosures	15
PART II
Item 5.	Market for Registrant'’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 6.	Reserved	18
Item 7.	Management'’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 8.	Financial Statements and Supplementary Data	30
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	7173
Item 9A.	Controls and Procedures	7173
Item 9B.	Other Information	7274
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	7274
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	7375
Item 11.	Executive Compensation	7375
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7375
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7375
Item 14.	Principal Accountant Fees and Services	7375
PART IV
Item 15.	Exhibits and Financial Statement Schedules	7476
Item 16.	Form 10-K Summary	7476
Exhibit Index		7678
Signatures		7779

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-K and documents incorporated by reference into it may contain forward-looking statements within the meaning of federal securities laws, which are not historical facts but rather are based on current expectations, estimates and projections about our business and industry, and our beliefs and assumptions. Words such as “believes,” “anticipates,” “plans,” “expects,” “estimates,” “will,” “goal,” “intend” and similar expressions are intended to identify forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by us that any of our plans will be achieved. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Such forward-looking information is also subject to various risks and uncertainties. Such risks and uncertainties include, but are not limited to, risks arising from our providing services to the healthcare industry and primarily providers of long-term care; credit and collection risks associated with the healthcare industry; the impact of bank failures; our claims experience related to workers’ compensation, general liability and ~~auto~~other insurance programs; the effects of changes in, or interpretations of laws and regulations governing the healthcare industry, our workforce and services provided, including state and local regulations pertaining to the taxability of our services and other labor-related matters such as minimum wage increases; the Company’s expectations with respect to selling, general and administrative ~~expense~~expenses; the ~~impacts~~impact of past or future cyber attacks or breaches; global events including ongoing international conflicts:; and the risk factors described in Part I of this report under “Government Regulation of Customers,” “Service Agreements and Collections,” and “Competition” and under “Item 1A. Risk Factors.”

These factors, in addition to delays in payments from customers and/or customers undergoing restructurings, have resulted in, and could continue to result in, significant additional bad debts in the near future. Additionally, our operating results have been in the past and could in the future be adversely affected by continued inflation particularly if increases in the costs of labor and labor-related costs, materials, supplies and equipment used in performing services (including the impact of potential tariffs) cannot be passed on to our customers.

In addition, we believe that to improve our financial performance we must continue to obtain service agreements with new customers, retain and provide new services to existing customers, achieve modest price increases on current service agreements with existing customers and/or maintain internal cost reduction strategies at our various operational levels. Furthermore, we believe that our ability to sustain the internal development of managerial personnel is an important factor impacting future operating results and the successful execution of our projected growth strategies. There can be no assurance that we will be successful in that regard.

Table of Contents

PART I

In this Annual Report on Form 10-K for the year ended December 31, ~~2024~~2025, Healthcare Services Group, Inc. (together with its wholly-owned subsidiaries listed in Exhibit 21, which has been filed as part of this Report) is referred to using terms such as the “Company,” “HCSG,” “we,” “us” or “our.”

Item I. Business.

General

Healthcare Services Group, Inc. is a Pennsylvania corporation, incorporated on November 22, 1976. We provide management, administrative and operating expertise and services to the ~~housekeeping~~environmental services, laundry, linen, facility maintenance and dietary service departments of primarily healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. We provide such services to approximately 2,~~600~~800 facilities throughout the continental United States as of December 31, ~~2024~~2025. We believe we are the largest provider of housekeeping, laundry and dietary management services to the long-term care industry in the United States.

Segment Information

The information called for herein is discussed below in Description of Services, and within Item 8 of this Annual Report on Form 10-K under Note 1213 — Segment Information in the Notes to Consolidated Financial Statements for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023.

Description of Services

We are organized into two reportable segments: housekeeping, laundry, linen and other services (“~~Housekeeping~~Environmental Services” or “EVS”) and dietary department services (“Dietary”). Our corporate headquarters provides centralized financial management and support, legal services, human resources management and other administrative services to the ~~Housekeeping~~Environmental Services and Dietary business segments.

We provide ~~Housekeeping~~EVS services to approximately 2,~~200~~300 customer facilities and provide Dietary services to approximately 1,600 facilities. Although we do not directly participate in any government reimbursement programs, our customers receive government reimbursements related to Medicare and Medicaid and are directly affected by any legislation and regulations relating to those programs.

We provide services primarily pursuant to full-service agreements with our customers. Under such agreements, we are responsible for the day-to-day management of our employees located at our customers’ facilities, as well as for the provision of certain supplies. We also provide services on the basis of management-only agreements for a limited number of customers. Under a management-only agreement, we provide management and supervisory services while the customer facility retains payroll responsibility for the non-supervisory staff. In certain management-only agreements, the Company maintains responsibility for purchasing supplies. Our agreements with customers typically provide for a renewable service term cancellable by either party upon 30 to 90 days’ notice after an initial period of 60 to 120 days.

~~Housekeeping~~Environmental Services

~~Housekeeping~~Environmental Services accounted for approximately 44.69%, or $~~765~~824.47 million, of our consolidated revenues in ~~2024~~2025. ~~Housekeeping~~Environmental ~~services~~Services consist of managing our customers’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of the customers’ facilities, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at the customers’ facilities. Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate housekeeping services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation. On-site management is responsible for all daily customer housekeeping department activities with regular support provided by a District Manager specializing in such services.

Table of Contents

~~Housekeeping’s~~Environmental Services operating performance is significantly impacted by our management of labor costs. In order to normalize and evaluate such costs in the context of the Company’s financial performance, management reviews labor costs as a percentage of ~~Housekeeping~~EVS segment revenues. ~~Housekeeping~~Environmental Services labor costs represented approximately 78.43% of ~~Housekeeping~~EVS revenues for ~~2024~~2025. Changes in employee compensation resulting from legislative or other governmental actions, market factors, adjustments to staffing levels and the composition of our labor force may adversely impact these costs. Similarly, an increase in the costs of supplies consumed in performing ~~Housekeeping~~Environmental ~~services~~Services may impact the segment’s ~~operating~~financial performance. In ~~2024~~2025, the cost of ~~Housekeeping~~EVS supplies as a percentage of ~~Housekeeping~~EVS revenues was 7.42%. Generally, the cost of such supplies is dictated by specific product market conditions, which are subject to price fluctuations influenced by factors outside of our control. Where possible, we negotiate fixed pricing from vendors for an extended period of time on certain supplies to mitigate such price fluctuations.

Dietary

Dietary services represented approximately 55.41%, or $~~950~~1,012.35 million, of our consolidated revenues in ~~2024~~2025. Dietary services consist of managing our customers’ dietary departments, which are principally responsible for food purchasing, meal preparation and professional dietitian services, which include the development of menus that meet the dietary needs of residents taking into account their age, medical history, and current treatment plans. On-site management is responsible for all daily dietary department activities with regular support provided by a District Manager specializing in dietary services. ~~We also offer clinical consulting services to our dietary customers which may be provided as a standalone service or be bundled with other dietary department services.~~ Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate dietitian services with other facility support functions in accordance with customer requests, dietary restrictions and any applicable regulations. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.

Dietary operating performance is impacted by price fluctuations in labor and supply costs resulting from similar factors discussed above for ~~Housekeeping~~Environmental Services. In ~~2024~~2025, the costs of labor- and food-related supplies represented approximately 5658.68% and 3230.59% of Dietary segment revenues, respectively.

Significant Customers

For the years ended December 31, 2024, 2023 and 2022, both the Housekeeping and Dietary segments earned revenue from several significant customers, including Genesis Healthcare, Inc. (“Genesis”). For the years ended December 31, 2024, 2023 and 2022, Genesis accounted for $148.9 million or 8.7%, $181.4 million or 10.9% and $169.1 million or 10.0% of the Company’s consolidated revenues, respectively. Revenues generated from Genesis were included in both operating segments mentioned above. Any extended discontinuance of revenues, or significant reduction of revenues, from this customer could, if not replaced, have a material impact on our operations. No other single customer or customer group represented 10% or more of consolidated revenues for the years ended December 31, 2024, 2023 and 2022.

Operational Management Structure

By applying our professional management techniques, we offer our customers the ability to manage certain housekeeping, laundry, linen, facility maintenance and dietary services and costs. We manage and provide our services through a network of management personnel, as illustrated below.

Vice President of Operations

↓

Director of Operations

↓

District Manager

↓

Facility Manager

Facilities are managed by an on-site Facility Manager, and if necessary, additional supervisory personnel. Such facility-level management personnel are responsible for the management of staff, scheduling, procurement, customer-service, quality control and overall day-to-day management of the ~~Housekeeping~~Environmental Services or Dietary function.

District Managers oversee the operations of the facilities within their districts. Their responsibilities include oversight of Facility Managers and management of personnel, operational performance, quality control and customer satisfaction while ensuring adherence to the Company’s systems and budgets. Directors of Operations oversee District Managers and provide management support, training and personnel management while ensuring operational performance is consistent with the Company’s systems and budgets. Vice Presidents of Operations are ultimately responsible for all aspects of the operations, including the compliance and financial performance of the Directors of Operations they oversee.

We believe our organizational structure facilitates our ability to best serve and expand our service offerings to existing customers while also securing new business.

Table of Contents

Directors of Operations oversee District Managers and provide management support, training and personnel management while ensuring operational performance is consistent with the Company’s systems and budgets.

Vice Presidents of Operations are ultimately responsible for all aspects of the operations, including the compliance and financial performance of the Directors of Operations they oversee.

We believe our organizational structure facilitates our ability to best serve and expand our service offerings to existing customers while also securing new business.

Market

The market for our services consists of a large number of facilities involved in various aspects of the healthcare industry, including long-term and post-acute care facilities (e.g., skilled nursing facilities, residential care and assisted living facilities) and hospitals (e.g., acute care, critical access and psychiatric). Such facilities may be specialized or general, privately owned or public, for-profit or not-for-profit, urban or rural, and may serve residents on a long-term or short-term basis. We market our services to facilities after consideration of a variety of factors including facility type, size, location and service opportunities (~~Housekeeping~~Environmental Services or Dietary). Although there can be no assurance, the market for our services, particularly in long-term and post-acute care, is expected to continue to grow as the population of the United States ages and as government reimbursement policies require increased cost control or containment by the constituents that comprise our target market.

Marketing and Sales

Our services are primarily marketed and sold by our marketing and ~~sales~~business development teams. These marketing and ~~sales~~business development efforts are supported by all levels of our corporate and operational management ~~team~~teams. We provide incentive compensation to our sales and operational personnel based on achieving financial and non-financial goals and objectives which are aligned with the key elements we believe are necessary for us to achieve overall improvement in our results, along with continued business development.

Our services are marketed and sold primarily through referrals and solicitation of target facilities. We also participate in industry trade shows as well as federal and state healthcare advocacy associations and related events. Such programs are typically attended by facility owners, administrators and supervisory personnel, thus presenting marketing opportunities for us. Indications of interest in our services arising from initial marketing efforts are followed up with a presentation regarding our services and an assessment of the service requirements of the facility. Thereafter, a formal proposal, including operational recommendations and proposed costs, is submitted to the prospective customer. Once the prospective customer accepts the proposal and executes our service agreement, we are structured to timely and efficiently establish our operations and systems at the customer facilities.

Government Regulation of Customers

We do not directly participate in any government reimbursement programs and our contractual relationships with our customers determine their payment obligations to us. However, our customers are subject to government regulation and laws which directly affect how they are paid for certain services they provide. Therefore, because our customers’ revenues are generally highly reliant on Medicare and Medicaid reimbursement funding rates, the overall effect of laws and trends in the long-term care industry have affected and could adversely affect our customers’ cash flows and their ability to make payments to us in accordance with agreed upon payment terms (see “Liquidity and Capital Resources” included in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations”).

The prospects for legislative action, both on the federal and state level, regarding governmental funding for ~~nursing~~our ~~homes~~customers ~~and the long-term care~~ industry are uncertain. We are unable to predict or to estimate the ultimate impact of any further changes in reimbursement programs affecting our customers’ future results of operations and/or their impact on our cash flows and operations.

Environmental Regulation

Our operations are subject to various federal, state and/or local laws concerning discharges into waterways and the generation, handling and disposal of waste and hazardous substances. Our past expenditures relating to environmental compliance have not had a material effect on our results of operations and are included in normal operating expenses. These laws and regulations are constantly evolving, and it is impossible to predict accurately the effect they may have upon the capital expenditures, earnings and our competitive position in the future. Based upon information currently available, we believe that expenditures relating to environmental compliance will not have a material impact on the business, results of operations, financial condition or cash flows of the Company.

Table of Contents

Environmental Regulation

Service Agreements and Collections

We have historically had a favorable customer retention rate and, although there can be no assurance, we expect to continue to maintain satisfactory relationships with our customers despite many of our service agreements being cancellable on short notice.

We have had varying collections experiences with respect to our accounts and notes receivable. We have sometimes extended the period of payment for certain customers beyond contractual terms. Such customers include those who have terminated service agreements and slow payers experiencing financial difficulties. In order to provide for such collection issues and the general risk associated with the granting of credit terms, we have recorded bad debt provisions (in an Allowance for Doubtful Accounts) of $4683.81 million, $3546.68 million and $3235.06 million in the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively ~~(see Schedule II - Valuation and Qualifying Accounts and Reserves for year-end balances)~~. As a percentage of total revenues, these provisions represented approximately 24.75%, 2.17% and 12.91% for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively. In making credit evaluations, in addition to analyzing and anticipating, where possible, the specific cases described above, we consider the general collection risk associated with trends in the long-term care industry. We establish credit limits through our payment terms, perform ongoing credit evaluations and monitor accounts to minimize the risk of credit loss. Despite our efforts to minimize credit risk exposure, customers could be adversely affected if future industry trends change in such a manner as to negatively impact their cash flows. If our customers experience a negative impact on their cash flows, it could have a material adverse effect on our results of operations and financial condition.

Competition

We compete primarily with the in-house service departments of our potential customers. In addition, a number of firms compete with us in the regional and national markets in which we conduct business.

Human Capital Resources

Ensuring a positive social impact is inherent in our mission to deliver exceptional services to an ever-changing healthcare industry. In delivering upon this goal, we strive for operational excellence while creating a safe working environment, promoting environmental and employee health and safety awareness and seeking to continuously create professional and career development opportunities for our employees in order to continue to deliver on our strategic focus and Company Vision - To Be THE Choice For Our Customers. We believe that attracting and retaining talent in the markets that we service is critical to the retention of and growth in relationships through good customer service, expansion of our services, effective execution in all that we do and cost management. To facilitate talent attraction and retention, we strive to make Healthcare Services Group, Inc. an inclusive, safe and healthy workplace, with opportunities for our employees to grow and develop in their careers, supported by competitive compensation, benefits and health and welfare programs.

Supporting our varied team of individuals drives us to continuously improve and provide developmental opportunities for our team members, encouraging all of our employees to reach their full potential. To support this we have launched a formal Employee Engagement and Recognition Program. We devise career development and promotional pathways for our employees, and our Manager-In-Training Program is accessible to all qualified and motivated employees, regardless of formal education level achieved. When appropriate, we advertise all on-demand opportunities to our employees in an effort to cultivate talent throughout the Company. We also focus on understanding the opportunities we can provide employees. We continue to focus on building a pipeline for talent to create more opportunities for workplace development and to support greater representation within the Company.

Employee Profile

At December 31, 2025, we employed approximately 36,000 people, of whom approximately 4,000 were corporate and field management personnel. The Company’s employment of some of its employees is subject to collective bargaining agreements that are negotiated by individual customer facilities and are assented by us, so as to bind us as an “employer” under the agreements. In other limited cases, we are direct parties to the agreements. We may be adversely affected by relations between our customer facilities and their employee unions, or between us and such unions. We consider our relationship with our employees to be good.

Table of Contents

Supporting our diverse team of individuals drives us to continuously improve and provide developmental opportunities for our team members, encouraging all of our employees to reach their full potential. To support this we have launched a formal Employee Engagement and Recognition Program. We devise career development and promotional pathways for our employees, and our Manager-In-Training Program is accessible to all qualified and motivated employees, regardless of formal education level achieved. When appropriate, we advertise all on-demand opportunities to our employees in an effort to cultivate talent throughout the Company. We also focus on understanding our diversity and inclusion strengths and opportunities. We continue to focus on building a pipeline for talent to create more opportunities for workplace diversity and to support greater representation within the Company. Highlights include the following:

•Documented annual and ongoing training for employees at all levels on diversity and inclusion;

•Celebrating and creating diversity among our teams;

•Our workforce consists of 69% women and 62% Black, Indigenous or people of color (“BIPOC”);

•Among field-based management positions, 61% are women and 50% are BIPOC; and

•Among our top quartile of compensation for employees, 64% are women and 53% are BIPOC.

Employee Profile

At December 31, 2024, we employed approximately 35,300 people, of whom approximately 4,000 were corporate and field management personnel. The Company’s employment of some of its employees is subject to collective bargaining agreements that are negotiated by individual customer facilities and are assented by us, so as to bind us as an “employer” under the agreements. In other limited cases, we are direct parties to the agreements. We may be adversely affected by relations between our customer facilities and their employee unions, or between us and such unions. We consider our relationship with our employees to be good.

Health and Safety

Our ability to meet the day-to-day needs and expectations of our customers and to fulfill our common goal to ensure the well-being of America’s most vulnerable is organically connected to the well-being of our people. As such, we are committed to the health, safety and wellness of our employees. We provide our employees and their families access to a variety of flexible and convenient health and ~~welfare~~wellness programs, including benefits that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and that offer choices where possible so they can customize their benefits to meet their needs and the needs of their families. All employees receive documented, annual training on our Environmental, Health and Safety Policy and are responsible for upholding and operating within the guidelines of this policy to ensure our business complies with all environmental and health and safety laws and regulations applicable to our operations.

Available Information

Healthcare Services Group, Inc. is a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and files reports, proxy statements and other information with the Securities and Exchange Commission (the “Commission” or “SEC”). Reports and other information we file with the Commission may be accessed at the Commission’s internet site: www.sec.gov. This site contains reports, proxies and information statements and other information regarding issuers that file electronically with the Commission.

Website Access

Our website address is www.~~hcsg~~hcsgcorp.com. Our filings with the Commission, as well as other pertinent financial and Company information, are available at no cost on our website as soon as reasonably practicable after the filing of such reports with the Commission. The references to our website and the SEC’s website are intended to be inactive textual references only and the contents of those websites are not incorporated by reference herein.

Table of Contents

Item 1A. Risk Factors

You should carefully consider the risk factors we have described below, as well as other related information contained within this ~~annual~~Annual ~~report~~Report on Form 10-K as these factors could materially and adversely affect our business, results of operations, financial condition and cash flows. We believe that the risks described below are our most significant risk factors but there may be risks and uncertainties that are not currently known to us or that we currently deem to be immaterial.

Risks Related to Macroeconomic Conditions

We have been, and may continue to be, adversely affected by inflationary and market fluctuations, including the impact of potential future tariffs, impacting the cost of products consumed in providing our services and our cost of labor. Additionally, we rely on a certain limited number of vendors for a substantial portion of ~~Housekeeping~~EVS and Dietary supplies.

Macroeconomic factors, including uncertainty surrounding global geopolitical instability, inflationary pressures, changes in interest rates and evolving government fiscal, monetary, trade and tax policies continue to contribute to an ever-changing operating environment. The United States has recently implemented changes to its trade policy, including increased tariffs on certain imported goods, pursuant to executive orders and related administrative actions. These measures may increase input costs, contribute to inflationary pressures, and heighten volatility in global supply chains.

Recent tariffs on certain imported goods have increased, and may continue to increase, the cost of some supplies and food products used in delivering our services. While these cost increases have not materially impacted our business to-date, sustained or expanded tariffs could adversely affect our business, results of operations, financial condition and/or cash flows in future periods. In addition, uncertainty surrounding future changes in U.S. trade policy may further contribute to volatility in supply costs and availability. Although we continue to pursue mitigating actions, including sourcing strategies, vendor negotiations and pricing adjustments where contractually permitted, there can be no assurance that such actions will fully offset the impact of higher tariffs. Any delay in, or inability to, pass increased costs through to customers could have a material adverse effect on our business, results of operations, financial condition and cash flows.

The prices we pay for the principal items we consume in performing our services are dependent primarily on current market prices. We have consolidated certain supply purchases with national vendors through agreements containing negotiated prospective pricing. In the event such vendors are not able to comply with their obligations under the agreements and we are required to seek alternative suppliers, we may incur increased costs of supplies.

Dietary supplies, to a much greater extent than ~~Housekeeping~~EVS supplies, are impacted by commodity pricing factors, including the impact of tariffs and diseases in livestock, which in many cases are unpredictable and outside of our control. We seek to pass on to customers such increased costs but sometimes we are unable to do so. Even when we are able to pass on such costs to our customers, from time to time, sporadic unanticipated increases in the costs of certain supply items due to market or economic conditions may result in a timing delay in passing on such increases to our customers. This type of spike and unanticipated increase in Dietary supplies costs could adversely affect Dietary’s operating performance, and the adverse effect could be greater if we are delayed in passing on such additional costs to our customers (e.g., where we may not be able to pass such increase on to our customers until the time of our next scheduled service billing review). We seek to mitigate the impact of an unanticipated increase in such supplies’ costs through consolidation of vendors and participation in group purchasing organizations, which increases our ability to obtain more favorable pricing.

A substantial number of our employees are hourly employees whose wage rates are affected by increases in the federal or state minimum wage rates, wage inflation or local job market adjustments. Also, at certain facilities that we service, our cost of labor may be influenced by changes in the respective collective bargaining agreements to which we are a party. As collective bargaining agreements are renegotiated, we may need to increase the wages paid to bargaining unit employees covered by such collective bargaining agreements. Although we have contractual rights to pass union and minimum wage increases through to our customers, we do not have a contractual right to automatically pass through all wage rate increases resulting from wage rate inflation or local job market adjustments, and we may be delayed in doing so. ~~Our~~Any delay in passing or inability to pass such wage increases through to our customers could have a material adverse effect on our financial condition, results of operations and cash flows.

~~Pandemics, epidemics or outbreaks of a contagious illness have in the past and may in the future adversely affect our business, results of operations, financial condition, or cash flows.~~6

~~Pandemics,~~Table ~~epidemics or outbreaks~~ of a contagious illness, and similar events, have caused and may in the future cause harm to us, our employees, customers, vendors, supply chain partners and financial institutions, which could have a material adverse effect on our business, results of operations, financial condition or cash flows. The impacts may include, but would not be limited to:Contents

Pandemics, epidemics or outbreaks of a contagious illness have in the past and may in the future adversely affect our business, results of operations, financial condition, and/or cash flows.

Pandemics, epidemics or outbreaks of a contagious illness, and similar events, have caused and may in the future cause harm to us, our employees, customers, vendors, supply chain partners and financial institutions, which could have a material adverse effect on our business, results of operations, financial condition and/or cash flows. The impacts may include, but would not be limited to:

•Decreased availability and/or increased cost of supplies due to increased demand around essential cleaning supplies including disinfecting agents, personal protective equipment (“PPE”) and food and food-related products due to increased global demand and disruptions along the global supply chains of these manufactures and distributors;

•Disruption to operations due to the unavailability of employees due to illness, quarantines, risk of illness, travel restrictions, vaccination mandates, or other factors that limit the availability of our existing or potential workforce;

•Limitations to the availability of our key personnel due to travel restrictions and access restrictions to our customers’ facilities;

•~~Our~~Requirements ~~ability~~ to meet ~~more~~ stringent, ~~medically-required procedures, and~~ infection control requirements at customer facilities and provide for medical procedures for employees;

•Elevated employee turnover which may impact our facility level performance and/or increase payroll expense and recruiting-related expenses;

6•New or additional measures required by national, state or local governments which may impact the availability of our employees and/or increase operating costs;

Table of Contents

•New or additional measures required by national, state or local governments may impact the availability of our employees and/or increase operating costs.

•Decreased census in the nursing home and long-term care industry, which could impact the financial health of our customers and thereby increase our associated credit risk with customers and increase pressures to modify our contractual terms; and

•Significant disruption of global financial markets, which could negatively impact our ability or our customers’ ability to access capital in the future.

War, terrorism, other acts of violence or natural or man-made disasters may affect the markets in which the Company operates, the Company’s customers, and could have a material adverse impact on our business, results of operations, financial condition and/or cash flows.

The Company’s business may be adversely affected by instability, disruption or destruction in a geographic region in which it operates, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or man-made disasters, including famine, flood, fire, earthquake, storm, pandemics or spread of disease. Such events may cause customers to suspend their decisions on using the Company’s services, make it impossible for us to render our services, cause restrictions and give rise to sudden significant changes in regional and global economic conditions and cycles. These events also pose significant risks to the Company’s personnel and to physical facilities and operations which could materially adversely affect the Company’s financial results.

Further, current international conflicts have created extreme volatility in the global financial markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets and heightened volatility of commodity food prices. Any such volatility or disruptions may have adverse consequences on us or the third parties on whom we rely. If the equity and credit markets deteriorate, including as a result of political unrest or war, it may make any necessary debt or equity financing more difficult to obtain in a timely manner or on favorable terms, more costly or more dilutive. Our business, results of operations, financial condition, and/or cash flows may be materially and adversely affected by any negative impact on the global economy, capital markets or commodity food prices resulting from these conflicts or any other geopolitical tensions.

Table of Contents

Changes in interest rates and financial market conditions have resulted in and may continue to result in fluctuating and even negative returns in our investments and could increase the cost of the borrowings under our borrowing agreements.

Although management believes we have a prudent investment policy, we are exposed to fluctuations in interest rates and in the market value of our investment portfolio which could adversely impact our financial condition and results of operations. Our marketable securities and restricted marketable securities consist of municipal bonds, treasury bonds, corporate bonds and other investments. Although there can be no assurance, we believe that our investment criteria requirements, which include investing in a diverse set of bonds, monitoring credit ratings and monitoring of our investments’ duration periods, reduce our exposure to investment losses. Increases in market interest rates could adversely affect our payment obligations with respect to our variable-rate line of credit and adversely affect our liquidity and earnings. In addition, the Company relies on its portfolio of marketable securities and restricted marketable securities for balance sheet support, and the value of the portfolio can be materially affected by declines in market prices.

The historical performance of our common stock, $0.01 par value (the “Common Stock”), reflects market expectations for our future operating results. Our business strategy focuses on growth and improving profitability through obtaining service agreements with new customers, providing new services to existing customers, obtaining modest price increases on service agreements with customers, maintaining internal cost reduction strategies at our various operational levels and executing targeted acquisitions and investments. If we are unable to continue either historical customer revenue and profitability growth rates or projected improvement, our operating performance may be adversely affected and the expectations for our market performance may not be met. Any failure to meet the market’s expectations for our revenue and operating results may have an adverse effect on the market price of our Common Stock.

Table of Contents

Risks Related to Customers and Distributors

We provide services to several customers which contribute significantly, on an individual as well as an aggregate basis, to our total revenues.

~~Genesis~~On ~~contributed~~July ~~8.7%~~9, ~~10.9%~~2025, ~~and~~Genesis 10Healthcare, Inc.0% of(“Genesis”) ~~our~~filed ~~total consolidated revenues~~ for ~~the~~Chapter ~~years~~11 ~~ended~~bankruptcy ~~December 31,~~protection ~~2024,~~in ~~2023~~the ~~and~~Northern ~~2022,~~District ~~respectively. As~~ of ~~December 31,~~Texas. ~~2024, the~~ Genesis ~~outstanding~~contributed ~~accounts~~7.3%, ~~receivable and notes receivable were $46~~8.17% ~~million~~ and ~~$21~~10.9% ~~million,~~of ~~respectively.~~our ~~Although~~total weconsolidated ~~expect~~revenues tofor ~~continue~~ the ~~relationship~~years ~~with~~ended ~~Genesis~~December 31, ~~there~~2025, ~~can~~2024 beand no2023, ~~assurance thereof~~respectively. Revenues generated from Genesis were included in both operating segments. Any extended discontinuance, or significant reduction, of revenues from this customer could, if not replaced, have a material impact on our operations. In addition, if Genesis fails to abide by current payment terms it could ~~increase our accounts receivable balance and~~ have a material adverse effect on our financial condition, results of operations, and cash flows. No ~~other~~ single customer or customer group represented more than 10% of consolidated revenues for the years ended December 31, 2025 and 2024, ~~2023,~~ and ~~2022~~no other single customer or customer group represented more than 10% of consolidated revenues for the year ended December 31, 2023.

~~Our~~Any future bankruptcies or financial instability among our key customers ~~are~~could ~~concentrated~~result in ~~the~~increased ~~healthcare~~credit ~~industry~~losses, ~~which~~reduced isrevenues, ~~subject~~disruptions to ~~changes~~service indelivery, ~~government~~and ~~regulation.~~material ~~Many~~adverse ofeffects on our ~~customers~~business, ~~rely~~results onof ~~reimbursement~~operations ~~from~~and ~~Medicare,~~financial ~~Medicaid~~condition. ~~and~~Our ~~other~~ability ~~third-party~~to ~~payers.~~mitigate ~~Rates~~these ~~from~~risks ~~such~~depends ~~payers~~on ~~may~~ongoing becredit ~~altered~~evaluations, ormonitoring ~~reduced~~customer financial health, ~~thus~~and ~~affecting~~enforcing ~~our~~contractual ~~customers’~~payment ~~results~~terms, ofbut ~~operations~~even ~~and~~these ~~cash~~measures ~~flows~~may not fully protect against losses from future customer bankruptcies.

Our customers are primarily concentrated in the healthcare industry, which is subject to changes in government regulation. Many of our customers rely on reimbursement from Medicare, Medicaid and other third-party payers. Rates from such payers may be altered or reduced, thus affecting our customers’ results of operations and cash flows.

We provide our services primarily to providers of long-term and post-acute care. We cannot predict what efforts, and to what extent, legislation and proposals to contain healthcare costs will ultimately impact our customers’ revenues through reimbursement rate modifications. Congress has enacted a number of laws during the past decade that have significantly altered, and may continue to alter, overall government reimbursement for nursing home services and the long-term care industry. Because many of our customers’ revenues are highly reliant on Medicare, Medicaid and other third-party payers’ reimbursement funding rates and mechanisms, the overall effect of these laws and trends in the long-term care industry have affected and could adversely affect our customers’ cash flows, and their ability to make payments to us on agreed upon payment terms. These factors, in addition to delays in payments from customers have resulted in, and could continue to result in, significant additional bad debts.

Table of Contents

The Company has substantial investment in the creditworthiness and financial condition of our customers.

The largest current asset on our balance sheet is the accounts and notes receivable balance from our customers. We grant credit to substantially all of our customers. Deterioration in the financial condition of a significant component of our customer base could hinder our ability to collect amounts due from our customers. Potential causes of such declines include national or local economic downturns, reduced census, increased operating costs, customers’ dependence on continued Medicare and Medicaid funding and the impact of additional regulatory actions and/or insufficient funding.

We have sometimes extended the period of payment for certain customers beyond contractual terms. Such customers include those who have terminated service agreements and slow payers experiencing financial difficulties. In order to provide for such collection issues and the general risk associated with the granting of credit terms, we have recorded bad debt provisions (in an Allowance for Doubtful Accounts) of $4683.81 million for the year ended December 31, ~~2024~~2025 as compared to $3546.68 million and $3235.06 million for the years ended December 31, ~~2023~~2024 and ~~2022~~2023, respectively. In making our credit evaluations, in addition to analyzing and anticipating, where possible, the specific cases described above, we consider the general collection risk associated with trends in the long-term care industry. We establish credit limits through our payment terms, perform ongoing credit evaluations and monitor accounts to minimize the risk of credit loss. Despite our efforts to minimize credit risk exposure, customers could be adversely affected if future industry trends change in such a manner as to negatively impact their cash flows. If our customers experience a negative impact on their cash flows, it could have a material adverse effect on our financial condition, results of operations and cash flows.

A significant majority of our customer base are multi-facility management groups and independent facility operators who lease the buildings in which they operate and may experience risks relating to their leases including termination, escalators, extensions and special charges.

The creditworthiness of our existing customers, and potential customers, is impacted by their ability to maintain positive relationships with their respective landlords. Any loss or deterioration in the relationship between our customers and their respective landlords may adversely affect their financial condition and ability to make payments on their service agreement with us on agreed upon terms. Any failure by our customers to make rent payments or comply with the provisions of their lease terms could result in the termination of such lease agreements. In such cases, our customers may lose their ability to continue conducting operations and as a result terminate their service agreements with us.

8For the year ended December 31, 2025, one distributor distributed more than 50% of our food and non-food dining supplies, and if our relationship, or its business, were to be disrupted, we could experience disruptions to our operations and cost structure.

Table of Contents

For the year ended December 31, 2024, one distributor distributed more than 50% of our food and non-food dining supplies, and if our relationship, or its business, were to be disrupted, we could experience disruptions to our operations and cost structure.

Although we negotiate the pricing and other terms for the majority of our purchases of food and dining supplies directly with national manufacturers, we procure these products and other items through Sysco Corporation (“Sysco”). Sysco is responsible for tracking our orders and delivering products to our specific locations. If our relationship with, or the business of, Sysco were to be disrupted, we would have to arrange alternative distributors and our operations and cost structure could be adversely affected.

Table of Contents

Risks Related to Operating Our Business

We have a Paid Loss Retrospective Insurance Plan for ~~auto,~~ general liability, ~~and~~ workers’ compensation and other insurance coverages.

We carry a high deductible ~~auto,~~ general liability, ~~and~~ workers’ compensation ~~program~~and other insurance programs and therefore retain a substantial portion of the risk associated with the possible losses under such programs. Under our insurance plans ~~for general liability and workers’ compensation~~, predetermined loss limits are arranged with our insurance company to limit both our per occurrence cash outlay and annual insurance plan cost. We regularly evaluate our claims payout experience and other factors related to the nature of specific claims in arriving at the basis for our accrued insurance claims estimate. Our evaluation is based primarily on current information derived from reviewing our claims experience and industry trends. In the event that our known claims experience and/or industry trends result in an unfavorable change in initial estimates of costs to settle such claims resulting from, among other factors, the severity levels of reported claims and medical cost inflation, it would have an adverse effect on our consolidated results of operations, financial condition and cash flows. Although we engage third-party experts to assist us in estimating appropriate reserves, the determination of the required reserves is dependent upon significant actuarial judgments. Changes in our insurance reserves as a result of our periodic evaluation of the related liabilities may cause significant fluctuations in our consolidated results of operations.

We primarily provide our services pursuant to agreements cancellable by either party upon 30 to 90 days’ notice after an initial 60 to 120 day service agreement period.

Our agreements with customers typically provide for a renewable service term, cancellable by either party upon 30 to 90 days’ notice after an initial period of 60 to 120 days. Consequently, our customers can often unilaterally decrease the amount of services we provide or terminate all services pursuant to the terms of our service agreements. Although we have historically had a favorable customer retention rate and expect to continue to maintain satisfactory relationships with our customers, in the event the Company were to lose a significant number of customers, such loss could in the aggregate materially adversely affect our consolidated results of operations and financial position.

The Company’s business success depends on the management experience of our key personnel.

We manage and provide our services through a network of management personnel, from on-site facility managers to our executive officers. Therefore, we believe that our ability to recruit and sustain the internal development of managerial personnel is an important factor impacting future operating results and our ability to successfully execute projected growth strategies. Our professional management personnel are the key personnel in maintaining current and selling additional services to existing customers and obtaining new customers.

Table of Contents

Any perceived or real health risks related to the food industry could adversely affect our Dietary segment.

We are subject to risks affecting the food industry generally including food spoilage and food contamination. Products we purchase and utilize in production are susceptible to contamination by disease-producing organisms, or pathogens, ~~such~~included, asbut not limited to, listeria monocytogenes, salmonella, campylobacter, hepatitis A, trichinosis and generic E. coli. Because these pathogens are generally found in the environment, there is a risk that these pathogens could be introduced to our products as a result of improper handling at the manufacturing, processing or food service level. Our suppliers’ manufacturing facilities and products are subject to extensive laws and regulations relating to health, food preparation, sanitation and safety standards. Difficulties or failures by these companies in obtaining any required licenses or approvals or otherwise complying with such laws and regulations could disrupt their operations which could adversely affect our operations. Furthermore, there can be no assurance that compliance with governmental regulations by our suppliers will eliminate the risks related to food safety. An outbreak of food related illness in any of our customer facilities could materially harm our business, consolidated results of operations and financial condition.

Additionally, the Company may be subject to liability if the consumption of our food products causes injury, illness or death. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused injury or illness could adversely affect our reputation.

Table of Contents

If we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

~~During~~Failure ~~2023, we identified a material weakness related~~ to ~~the~~maintain ~~design~~appropriate and ~~operation~~effective of internal controls over our financial reporting ~~related~~could topotentially ~~accrued~~subject ~~payroll~~us ~~liabilities~~to ~~from~~sanctions ~~employee~~or ~~vested~~investigations ~~vacation.~~by ~~Our~~the ~~controls~~SEC ~~over~~or ~~accrued~~other ~~payroll~~regulatory ~~liabilities~~authorities ~~were~~and ~~not~~could ~~sufficiently~~cause ~~designed~~us to ~~consider~~delay ~~all~~the ~~accounting~~filing ~~and disclosure ramifications~~ of ~~such~~required ~~accrued~~reports ~~payroll~~with ~~liabilities.~~the ToSEC ~~address~~and our ~~material~~reporting ~~weakness,~~of wefinancial ~~have~~results. ~~made~~Any ~~changes~~of tothese ~~our~~events ~~controls~~could asresult ~~previously described~~ in ~~our~~a ~~periodic~~decline ~~reports~~in ~~with~~ the ~~SEC.~~market ~~Although~~price ~~that~~of ~~material~~our ~~weakness~~Common ~~was~~Stock. ~~subsequently~~Although ~~remediated,~~we ~~there~~have istaken asteps ~~possibility~~to ~~that~~maintain ~~there~~our ~~will~~internal becontrol ~~material~~structure ~~weaknesses~~as inrequired, ~~the~~we ~~future~~cannot ~~and~~guarantee that ~~material~~a ~~misstatements~~control todeficiency ~~the Company’s future annual or interim financial statements~~ will not beresult ~~prevented~~in ora ~~detected~~misstatement in athe ~~timely basis~~future.

Failure to maintain appropriate and effective internal controls over our financial reporting could potentially subject us to sanctions or investigations by the SEC or other regulatory authorities and could cause us to delay the filing of required reports with the SEC and our reporting of financial results. Any of these events could result in a decline in the market price of our Common Stock. Although we have taken steps to maintain our internal control structure as required, including remediating our material weakness, we cannot guarantee that a control deficiency will not result in a misstatement in the future.

Our business could be negatively affected as a result of actions of activist shareholders, and such activism could impact the trading value of our securities.

Shareholders may, from time to time, engage in proxy solicitations or advance shareholder proposals or otherwise attempt to effect changes and assert influence on our Board of Directors and senior management. Activist campaigns that contest or conflict with our strategic direction or seek changes in the composition of our Board of Directors or senior management could have an adverse effect on our operating results and financial condition. A proxy contest would require us to incur significant legal and advisory fees, proxy solicitation expenses and administrative and associated costs and require significant time and attention by our Board of Directors and senior management, diverting their attention from the pursuit of our business strategy. Any perceived uncertainties as to our future direction and control, our ability to execute on our strategy, or changes to the composition of our Board of Directors or senior management arising from a proxy contest could lead to the perception of a change in the direction of our business or instability which may result in the loss of potential business opportunities, make it more difficult to pursue our strategic initiatives, or limit our ability to attract and retain qualified personnel and business partners, any of which could adversely affect our business, financial condition, and results of operations. If individuals are ultimately elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders. We may choose to initiate, or may become subject to, litigation as a result of a proxy contest or matters arising from a proxy contest, which would serve as a further distraction to our Board of Directors and senior management and would require us to incur significant additional costs. In addition, actions such as those described above could cause significant fluctuations in our stock price based upon temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Table of Contents

Risks Related to Governmental and Regulatory Changes

Changes to federal healthcare legislation may adversely affect our operating costs and results of operations.

Continued changes to the health insurance industry and its obligations on employers could impact our operating costs. Any requirements to provide additional benefits to our employees, or the payment of penalties if such benefits are not provided, would increase our expenses. If we are unable to pass-through these charges to our customers to cover these expenses, such increases could adversely impact our operating costs and our consolidated results of operations.

In addition, often new regulations result in additional reporting requirements for businesses. These and other requirements could result in increased costs, expanded liability exposure and other changes in the way we provide healthcare insurance and other benefits to our employees.

States in which our customers are located could experience significant budget deficits and such deficits may result in reduction of reimbursements to nursing homes.

States in which our customers are located could have budget deficits as a result of lower than projected revenue collections and increased demand for the funding of entitlements. As a result of these and other adverse economic factors, state Medicaid programs have and may revise reimbursement structures for nursing home services. Any disruption or delay in the distribution of Medicaid and related payments to our customers will adversely affect their cash flows and impact their ability to pay us as agreed upon for the services provided.

Table of Contents

Governmental regulations related to labor, employment, immigration and health and safety could adversely impact our business, results of operations, financial condition and cash flows.

Our business is subject to various federal, state and local laws and regulations in areas such as labor, employment, immigration and health and safety. These laws frequently evolve through case law, legislative changes and changes in regulatory interpretation, implementation and enforcement. The change in administration following the 2024 U.S. presidential election has led and will lead to leadership changes at U.S. federal regulatory agencies with oversight responsibility over the Company and our customers, including, but not limited to, the Centers for Medicare and Medicaid Services and the Health and Human Services Department.

We continue to experience a highly competitive labor market, particularly for frontline hourly employees. Ongoing labor shortages, increased competition for workers, employee turnover, wage inflation and changes in immigration or workforce policies could further increase labor costs and impact service quality. Our inability to recruit, train and retain qualified employees on acceptable terms could adversely affect our operating performance, customer satisfaction and profitability.

Our policies and procedures and compliance programs are subject to adjustments in response to these changing regulatory and enforcement environments, which could increase our costs of services provided. Although we have contractual rights to pass through cost increases we incur to our customers due to regulatory changes, our delay in, or inability to pass such costs through to our customers, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, if we fail to comply with applicable laws, we may be subject to lawsuits, investigations, criminal sanctions or civil remedies, including fines, penalties, damages, reimbursements or injunctions. Also, our customers’ facilities are subject to periodic inspection by federal, state and local authorities for compliance with state and local department of health requirements. Expenses resulting from failed inspections of the departments that we service could result in our customers being fined and seeking recovery from us, which could also adversely impact our business, financial condition, results of operations and cash flows.

Table of Contents

Federal, state and local tax rules can adversely impact our business, results of operations, financial position and cash flows.

WeOn ~~are~~July ~~subject~~4, ~~to federal~~2025, ~~state and local taxes in~~ the ~~United~~One ~~States.~~Big ~~Significant~~Beautiful ~~judgment~~Bill isAct ~~required~~(“OBBBA”) inwas ~~determining~~signed ~~the~~into ~~provision~~law, ~~for~~extending ~~income~~and ~~taxes.~~modifying Wevarious ~~believe~~federal ~~our income~~ tax ~~estimates are reasonable~~laws, ~~but~~including ~~such~~provisions ~~estimates~~of ~~assume~~the noTax ~~changes~~Cuts inand ~~current~~Jobs ~~tax~~Act ~~rates.~~of ~~In addition~~2017, iftax ~~the~~credits ~~Internal~~and ~~Revenue~~deductions. ~~Service~~The orOBBBA ~~other~~contains ~~taxing~~a ~~authority~~wide ~~disagrees~~variety onof aprovisions ~~tax~~with ~~position~~different weeffective ~~have~~dates, ~~taken~~ and ~~upon~~many ~~final~~require ~~adjudication~~interpretation weand ~~are~~regulatory ~~required~~guidance. toChanges ~~change~~in ~~such~~interpretation, ~~position~~implementation, weor ~~could~~future ~~incur~~amendments ~~additional~~could increase tax ~~liability~~liabilities, ~~including~~reduce ~~interest~~available ~~and~~credits ~~penalties.~~or ~~Such~~deductions, ~~costs~~increase ~~and~~compliance ~~expenses~~costs, ~~could~~or ~~have~~otherwise aadversely ~~material~~affect ~~adverse impact on~~ our business, financial condition, ~~consolidated~~ results of operations and cash flows. ~~Additionally~~In addition, the ~~taxability~~Work ofOpportunity ~~our~~Tax ~~services~~Credit ~~is subject to various interpretations within the taxing jurisdictions in which we operate. Consequently~~(“WOTC”), ~~in the ordinary course of business,~~ a ~~jurisdiction~~federal ~~may contest our reporting positions with respect to the application of its~~ tax ~~code~~credit toavailable ~~our~~for ~~services.~~hiring ~~A conflicting position taken by a state or local taxation authority on the taxability of our services could result in additional tax liabilities~~ and ~~could~~employing ~~negatively~~individuals ~~impact~~from ~~our~~certain ~~competitive~~targeted ~~position~~groups infacing ~~that~~barriers ~~jurisdiction. If we fail~~ to ~~comply~~employment ~~with applicable tax laws~~ and ~~regulations,~~for wewhich ~~could~~the ~~suffer~~Company ~~civil~~has ~~or criminal penalties~~ in ~~addition to~~ the ~~delinquent~~past, ~~tax~~and ~~assessment.~~expects ~~In the taxing jurisdictions where our services have been determined~~ to ~~be subject to tax~~receive, ~~the~~reductions ~~jurisdiction~~in ~~may~~federal ~~increase~~income ~~the~~taxes ~~tax~~paid ~~rate~~was ~~assessed on such services. We seek to pass through to our customers such tax increases. In the event we are~~ not ~~able~~extended toas ~~pass~~part ~~through any portion~~ of the ~~tax~~OBBBA ~~increase, our financial condition, consolidated results of operations~~ and ~~cash~~expired ~~flows~~on ~~could~~December be31, ~~adversely impacted~~2025.

We are subject to federal, state and local taxes in the United States. Significant judgment is required in determining the provision for income taxes. We believe our income tax estimates are reasonable, but such estimates assume no changes in current tax rates. In addition, if the Internal Revenue Service or other taxing authority disagrees on an income tax position we have taken, including tax positions concerning the Employee Retention Tax Credit (“ERC”), and upon final adjudication we are required to change such position, we could incur additional tax liability, including interest and penalties. Such expenses could have a material adverse impact on our financial condition, consolidated results of operations and cash flows.

Additionally, the taxability of our services is subject to various interpretations within the taxing jurisdictions in which we operate. Consequently, in the ordinary course of business, a jurisdiction may contest our reporting positions with respect to the application of its tax code to our services. A conflicting position taken by a state or local taxation authority on the taxability of our services could result in additional tax liabilities and could negatively impact our competitive position in that jurisdiction. If we fail to comply with applicable tax laws and regulations, we could suffer civil or criminal penalties in addition to the delinquent tax assessment. In the taxing jurisdictions where our services have been determined to be subject to tax, the jurisdiction may increase the tax rate assessed on such services. We seek to pass through to our customers such tax increases. In the event we are not able to pass through any portion of the tax increase, our financial condition, consolidated results of operations and cash flows could be adversely impacted.

Table of Contents

Our business and financial results could be adversely affected by unfavorable results of material litigation or governmental inquiries.

We are currently involved in pending civil litigation and government inquiries which arise in the ordinary course of business. These matters relate to, among other things, general liability, payroll or employee-related matters. Legal actions could result in substantial monetary damages and expenses and may adversely affect our reputation and business status with our customers, whether or not we are ultimately determined to be liable. The outcome of litigation, particularly class action and collective action lawsuits and regulatory actions, is difficult to assess or quantify. The plaintiffs in these types of actions may seek recovery of very large or indeterminate amounts, and estimates may remain unknown for substantial periods of time.

While the Company is vigorously defending against all litigation claims asserted, litigation could result in substantial costs to the Company and a diversion of the Company’s management’s attention and resources, which could harm its business. In addition, the uncertainty of pending lawsuits or potential filing of additional lawsuits could lead to more volatility and a reduction in the Company’s stock price.

We assess contingencies to determine the degree of probability and range of possible loss for potential accrual in our financial statements. We accrue estimated loss contingencies in our financial statements when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Due to the unpredictable nature of litigation, assessing contingencies is highly subjective and requires judgments about future events. The amount of actual losses may differ from our current assessment. As a result of the costs and expenses of defending ourselves against lawsuits or claims, and risks and consequences of legal actions, regardless of merit, our business, results of operations, financial position and cash flows could be adversely affected or cause variability in our results compared to expectations.

Stakeholder expectations for and compliance with federal and state environmental, social and governance (“ESG”) requirements can adversely impact our business, results of operations, financial position and cash flows.

We are subject to certain ~~federal and~~ state rules covering ESG initiatives including mandated annual reporting and compliance with commonly accepted ESG frameworks. Laws and regulations in these areas continue to emerge and evolve, which may require us to undertake costly initiatives or operational changes in order to achieve compliance. Non-compliance with these emerging rules or standards or a failure to address regulator expectations may result in potential cost increases, litigation, fines, penalties, or otherwise adversely impact our business, results of operations, financial position and cash flows.

12Risks Related to Technology, Cybersecurity, Data Privacy and Artificial Intelligence

Table of Contents

Risks Related to Technology, Cybersecurity and Data Privacy

We have experienced a cyber-attack and breach, and may in the future experience cyber-attacks, breaches or other events which could cause operational disruptions, fraud or theft of sensitive information.

Aspects of our operations are reliant upon internet-based activities, such as ordering supplies and back-office functions such as accounting and transaction processing, making and accepting payments, processing payroll and other administrative functions. A significant disruption or failure of our information technology systems may have a significant impact on our operations, potentially resulting in service interruptions, security violations, regulatory compliance failures and other operational difficulties. In addition, any attack perpetrated against our information systems including through a system failure, security breach or disruption by malware or other damage, could similarly impact our operations and result in loss or misuse of information, litigation and potential liability. Further, like other companies, we have been subject to, and will continue to be subject to, cyber attacks and breaches and other vulnerabilities to data security incidents. On October 9, 2024, we identified a cybersecurity incident, which involved unauthorized activity within some of our systems. The incident has not caused, and is not expected to cause, disruption of our business operations, although there can be no assurance thereof.

Although we have taken steps intended to mitigate the risks presented by potential cyber incidents, it is not possible to protect against every potential power loss, telecommunications failure, cybersecurity attack, data breach or similar event that may arise. Moreover, the safeguards we use are subject to human implementation and maintenance, technology evolutions and other uncertainties. Any of these cyber incidents may result in a violation of applicable laws or regulations (including privacy and other laws), damage our reputation, cause a loss of customers and give rise to legal claims, litigation, monetary fines and other penalties, each of which could have an adverse effect on our financial condition, results of operations and/or ~~liquidity~~cash flows.

Table of Contents

While we maintain insurance coverage that may, subject to policy terms and conditions including deductibles, cover specific aspects of cyber risks, such insurance coverage may be insufficient to cover all losses. Third parties to whom we outsource certain of our functions are also subject to the risks outlined above. We review and assess the cybersecurity controls of our third-party service providers and vendors, as appropriate, and make changes to our business processes to manage these risks. Data breaches of such third parties could have an adverse effect on our financial condition, results of operations and liquidity.

We ~~are~~have ~~evaluating~~implemented, ~~use~~and ~~cases~~continue to ~~implement~~evaluate additional use cases for, generative artificial intelligence (“Gen AI”) and other automation technologies ~~into~~in ~~our~~certain business processes,. ~~which~~The ~~may~~use ~~present~~of ~~additional~~these technologies may involve risks related to ~~our~~system ~~business~~reliability, data integrity, cybersecurity, regulatory compliance, ethical considerations, workforce adoption, and the need for significant ongoing investment and oversight. Applicable laws, regulations, and standards governing artificial intelligence and automation are evolving and may be subject to differing interpretations.

~~We are currently evaluating the potential use of Gen AI technology across departments within our business.~~ Failure to ~~properly~~appropriately ~~manage~~govern, ~~Gen AI technology could impact services provided~~monitor, ~~which~~and ~~could~~manage ~~adversely~~the ~~impact~~development ~~our~~and ~~business,~~use ~~financial condition, results~~ of ~~operations~~automation and ~~cash~~artificial ~~flows.~~intelligence ~~Implementing~~technologies ~~Gen AI solutions~~ could ~~also~~result ~~lead~~in tooperational ~~unauthorized~~disruptions, ~~access~~data toprivacy ~~sensitive~~or ~~information~~security ~~and~~incidents, ~~could~~reputational ~~adversely~~harm, ~~impact~~regulatory ~~our~~scrutiny, ~~business.~~litigation, Ator ~~the~~other ~~same~~legal ~~time~~exposure, ifany ~~we fail to keep pace with the rapid evolution~~ of ~~Gen~~which ~~AI technologies, such delays~~ could adversely ~~impact~~affect our business., Infinancial ~~addition~~condition, ~~the~~results ~~evolving~~of ~~regulatory~~operations, ~~landscape for Gen AI technologies requires continuous monitoring~~ and ~~adaptation~~cash ~~to ensure compliance and to mitigate potential legal risks~~flows.

While we have implemented Gen AI and automation solutions in certain areas of our business, no Gen AI technologies are used for financial reporting purposes or for functions related to our internal controls over financial reporting. Implementing additional Gen AI solutions could lead to unauthorized access to sensitive information and could adversely impact our business. Additionally, failure to keep pace with the rapid evolution of Gen AI technologies or the evolving regulatory landscape could result in operational or compliance risks that could adversely affect our business, financial condition, results of operations and cash flows.

Item 1B. Unresolved Staff Comments.

None.

Table of Contents

Item 1C. Cybersecurity.

Cybersecurity Risk Management and Strategy

The Company adopted an Information Security Policy which governs the Company’s management of information technology (“IT”) systems, network, information, data and assets. HCSG’s Information Security Policy is periodically reviewed based on the National Institute of Standards and Technology Cybersecurity Framework. The Company regularly monitors and measures the performance of the IT Systems and Assets and the Information Security Policy. HCSG has procedures to ensure that any of its vendors and suppliers that create, utilize or process our data take a similar, risk-based approach to information security.

Management maintains the cybersecurity risk prevention program which includes ongoing employee education and procedures for cybersecurity incident prevention, detection and response. The Company retains third parties, including IT professionals and legal counsel, specializing in cybersecurity risk management to assist in implementing cybersecurity controls. The Company oversees and identifies material risks from cybersecurity threats associated with its use of third-party service providers by reviewing SOC 1 or SOC 2 reports (whichever is more applicable) for key outsourced systems, including all systems which house protected health information or personally identifiable information. The cybersecurity risk prevention program is part of the Company's overall risk management program.

Please refer to the risk factor titled “We have experienced a cyber-attack ~~attacks~~ and ~~breaches~~breach, and may in the future experience cyber -attacks, ~~and~~ breaches or other events which could cause operational disruptions, fraud or theft of sensitive information.” in “Risk Factors” in Part I, Item 1A of this Form 10-K for more information on risks posed by cybersecurity threats to the Company.

As previously disclosed in a Form 8-K filed on October 16, 2024, on October 9, 2024 we identified a cybersecurity incident, which involved unauthorized activity within some of our systems. We immediately activated the Company’s Cyber Incident Response Plan (“IRP”) to investigate such activity with the assistance of leading third-party cybersecurity experts. We also notified law enforcement authorities. The Company is subject to class action litigation arising from this incident. We continue to monitor the situation and take appropriate actions consistent with our response protocols. As of the date of this filing, the incident has not caused, and is not expected to cause, disruption of the Company’s business operations. And although there can be no assurance, we do not believe the identified cybersecurity incident will have a material effect on our business, financial condition, results of operations or cash flows.

Table of Contents

Management’s Role in Assessing and Managing Material Risks from Cybersecurity Threats

The Company’s day-to-day risk management is under the direction of Jason J. Bundick, the Company’s Executive Vice President, Chief Compliance Officer, General Counsel and Secretary. Jason Osbeck, the Company’s Senior Vice President of Information and Technology, is responsible for day-to-day cybersecurity risk management under the direction of Mr. Bundick. Mr. Osbeck has served in this role at the Company since 2012.

The Company has an IRP which details the Company’s policies and procedures in the event of a cyber incident. The Company’s IT department, led by Mr. Osbeck, logs all potential cybersecurity incidents reported which are then reviewed by an Incident Response Team (“IRT”), a cross-functional internal team including IT, risk management, legal and other departmental representation as necessary to identify the potential impact of the cybersecurity incident. As needed, the IRT will consult with third -party legal counsel and IT advisory firms to appropriately respond to existing cyber threats. In the event a material incident is identified, the Company will report such incidents in compliance with applicable law. Material cyber events, if any, are reported to the Board of Directors as they occur. Additionally, Mr. Bundick provides quarterly updates to the Audit Committee on all cybersecurity matters during the quarter.

Board of Directors’ Oversight of Cybersecurity Risks

Our Board is responsible for overseeing the Company’s risk management process. The Board focuses on the Company’s general risk management strategy, including the most significant risks facing the Company, and ensures that appropriate risk mitigation strategies are implemented by management. The Audit Committee oversees the Company’s cybersecurity risk mitigation efforts. The Audit Committee reports to the full Board as appropriate, including when a matter rises to the level of a material risk.

Table of Contents

Item 2. Properties.

We lease our corporate offices, located at 3220 Tillman Drive, Suite 300, Bensalem, Pennsylvania 19020. The Pennsylvania office is the headquarters of Healthcare Services Group, Inc., ELuminate, LLC and Platinum Cleaning Services of Indianapolis, LLC. We also lease office space at other locations in Connecticut, Florida, New Jersey, Texas and Virginia. The New Jersey office is the headquarters of HCSG Insurance Corp (“HCSG Insurance”), our captive insurance company, as well as HCSG East, LLC, HCSG West, LLC, HCSG Central, LLC, HCSG Staff Leasing Solutions, LLC, HCSG Labor Supply, LLC, HCSG East Labor Supply, LLC, and HCSG Clinical Services, LLC. The Virginia office is the headquarters of Meriwether-Godsey, Inc. The other locations serve as divisional or regional offices providing management and administrative services to both of our operating segments in their respective geographical areas. No individual parcel of real estate owned or leased is of material significance to our total assets.

Management does not foresee any difficulties with regard to the continued utilization of these premises. We also believe that such properties are sufficient to support our current operations.

Item 3. Legal Proceedings.

In the normal course of business, the Company is involved in various administrative and legal proceedings, including labor and employment, contracts, personal injury and insurance matters.

At this time, the Company is unable to reasonably estimate possible losses or form a judgment that an unfavorable outcome is either probable, reasonably possible or remote with respect to certain pending litigation claims asserted.

In light of the uncertainties involved in such proceedings, the ultimate outcome of a particular matter could become material to the Company’s results of operations for a particular period depending on, among other factors, the size of the loss or liability imposed and the level of the Company’s operating income for that period.

Item 4. Mine Safety Disclosures.

Not applicable.

Table of Contents

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

The Company’s Common Stock is traded under the symbol “HCSG” on the Nasdaq Global Select Market. As of February 1211, ~~2025~~2026, there were approximately 7370.53 million shares of our Common Stock outstanding.

Holders

As of February 1211, ~~2025~~2026, we had approximately ~~400~~300 holders of record of our Common Stock. This does not include persons who hold our Common Stock in nominee or “street name” accounts through brokers or banks.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth the Company’s equity compensation plans, on an aggregated basis, the number of shares of our Common Stock subject to outstanding stock awards, the weighted-average exercise price of stock awards, and the number of shares remaining available for future award grants as of December 31, ~~2024~~2025.

Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and ~~Rights1~~Rights)1

Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Issued and not Exercised)2

(a)

(b)

(c)

(in thousands, except per share amounts)

Equity compensation plans approved by security holders

4,~~302~~581

2825.2399

43,~~268~~347

Total

4,~~302~~581

2825.2399

43,~~268~~347

1.Represents shares of Common Stock issuable upon exercise of outstanding stock awards granted under the 2020 Omnibus Incentive Plan (as amended, the “Amended 2020 Plan”) and carryover shares from pre-existing equity plans.

2.Includes 21.46 million shares available for future grant under the Amended 2020 Plan, 1.76 million shares available for issuance under the Company’s 1999 Employee Stock Purchase Plan, as amended (the “1999 Plan”) and 0.21 million shares available for issuance under the Company’s Amended and Restated Deferred Compensation Plan (the “Deferred Compensation Plan”). Treasury shares may be issued under the 1999 Plan and the Deferred Compensation Plan.

Table of Contents

Performance Graph

The following graph matches the Company’s cumulative five-year total shareholder return on Common Stock with the cumulative total returns of the ~~Nasdaq Composite Index,~~ S&P Midcap 400 Index and the Russell 2000 Index. The Company plans to discontinue the use of the Nasdaq Composite Index in the Performance Graph going forward as the Company is not required to include such index pursuant to Regulation S-K Item 201(e)(1)(ii). The graph tracks the performance of a $100 investment in our Common Stock and in each index (with the reinvestment of all dividends) from December 31, ~~2019~~2020 to December 31, ~~2024~~2025. The stock price performance included in this graph is not necessarily indicative of future stock price performance.

We believe the Company is unique in its service offerings and customer base, and among its closest industry peers, it is unique in size and financial profile. As such, we do not believe that we can reasonably identify a peer group for the purposes of Regulation S-K Item 201(e)(1)(ii)(B) and have instead opted to utilize the Russell 2000 Index to compare the Company performance to issuers with similar market capitalization. The Company has also included the S&P Midcap 400 Index due to certain equity awards granted by the Company being benchmarked against this index.

Comparison of 5 Year Cumulative Total Return*

Among Healthcare Services Group, Inc., the Russell 2000 Index, and the S&P Midcap 400 Index ~~and the Nasdaq Composite Index~~.

*$100 invested on December 31, 2019 in stock or index, including reinvestment of dividends.



	December 31,
Company / Index	2020		2021		2022		2023		2024		2025
Healthcare Services Group, Inc.	$	100.00	$	65.46	$	46.69	$	40.35	$	45.19	$	74.40
S&P Midcap 400	$	100.00	$	124.76	$	108.47	$	126.29	$	143.88	$	154.68
Russell 2000	$	100.00	$	114.82	$	91.35	$	106.82	$	119.14	$	134.40

~~Fiscal~~This ~~year~~performance ~~ending~~graph ~~December~~shall 31not be deemed ‘soliciting material’ or ‘filed’ with the SEC, nor shall it be subject to Regulation 14A or 14C or the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended. The comparisons in the performance graph are based on historical data and are not indicative of, or intended to forecast, the possible future performance of Healthcare Services Group, Inc.’s common stock.

	December 31,
Company / Index	2019		2020		2021		2022		2023		2024
Healthcare Services Group, Inc.	$	100.00	$	119.55	$	78.25	$	55.82	$	48.24	$	54.03
Russell 2000	$	100.00	$	119.96	$	137.74	$	109.59	$	128.14	$	142.93
Nasdaq Composite	$	100.00	$	144.92	$	177.06	$	119.45	$	172.77	$	223.87
S&P Midcap 400	$	100.00	$	113.66	$	141.80	$	123.28	$	143.54	$	163.54

Table of Contents

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Repurchases of Equity Securities

On February 14, 2023, our Board of Directors authorized the repurchase of up to 7.5 million outstanding shares of common stock (the “2023 Repurchase Plan”). We remain authorized to purchase 62.0 million shares of common stock under the 2023 Repurchase Plan.

Shares repurchased pursuant to the 2023 Repurchase Plan during the three months ended December 31, ~~2024~~2025, were as follows:

Quarter Ended December 31, 2024	Total number of shares of Common Stock repurchased	Average price paid per share of Common Stock		Aggregate purchase price of Common Stock repurchases1		Number of remaining shares authorized for repurchase
Quarter Ended December 31, 2025	Total number of shares of Common Stock repurchased	Average price paid per share of Common Stock		Aggregate purchase price of Common Stock repurchases1		Number of remaining shares authorized for repurchase
				(in thousands)
	(in thousands, except per share amounts)
October 1, 2024 - October 31, 2024	90,100	$	11.10	$	997	6,030
October 1, 2025 - October 31, 2025	366	$	17.06	$	6,251	2,745
November 1, 2024 - November 30, 2024	—	$	—	$	—	6,030
November 1, 2025 - November 30, 2025	356	$	17.76	$	6,329	2,389
December 1, 2024 - December 31, 2024	—	$	—	$	—	6,030
December 1, 2025 - December 31, 2025	356	$	19.11	$	6,798	2,033
Fourth quarter	901,~~100~~078	$	1117.1098	$	~~997~~19,378	62,~~030~~033

1.Excludes commissions and other costs of ~~less than~~ $0.12 million.

Item 6. Reserved.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of our operations in conjunction with our Consolidated Financial Statements and the related notes to those statements included elsewhere in this report. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the section entitled “Risk Factors,” and elsewhere in this report on Form 10-K. We are on a calendar year end, and except where otherwise indicated, “~~2024~~2025” refers to the year ended December 31, ~~2024~~2025, and “~~2023~~2024” refers to the year ended December 31, ~~2023~~2024. Discussions of ~~2022~~2023 items and year-to-year comparisons between ~~2023~~2024 and ~~2022~~2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2023~~2024.

Results of Operations

The following discussion is intended to provide the reader with information that will be helpful in understanding our financial statements, including the changes in certain key items when comparing financial statements period to period. We also intend to provide the primary factors that accounted for those changes as well as a summary of how certain accounting principles affect our financial statements. In addition, we are providing information about the financial results of our two operating segments to further assist in understanding how these segments and their results affect our consolidated results of operations. This discussion should be read in conjunction with our consolidated financial statements as of ~~December 31, 2024~~ and for the ~~year~~years ~~then~~ ended December 31, 2025 and 2024 and the notes accompanying those financial statements.

Overview

We provide management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of primarily healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. We provide such services to approximately 2,~~600~~800 facilities throughout the continental United States as of December 31, ~~2024~~2025. We believe we are the largest provider of housekeeping, laundry and dietary management services to the long-term care industry in the United States.

Table of Contents

We provide services primarily pursuant to full-service agreements with our customers. Under such agreements, we are responsible for the day-to-day management of the employees located at our customers’ facilities, as well as for the provision of certain supplies. We also provide services on the basis of management-only agreements for a limited number of customers. Under a management-only agreement, we provide management and supervisory services while the customer facility retains payroll responsibility for the non-supervisory staff. In certain management-only agreements, the Company maintains responsibility for purchasing supplies. Our agreements with customers typically provide for a renewable service term cancellable by either party upon 30 to 90 days’ notice after an initial period of 60 to 120 days.

We are organized into two reportable segments: housekeeping, laundry, linen and other services (“~~Housekeeping~~Environmental Services” or “EVS”), and dietary department services (“Dietary”).

~~Housekeeping~~EVS services consist of managing our customers’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of the customers’ facilities, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at the customers’ facilities. Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate housekeeping services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation. On-site management is responsible for all daily customer housekeeping department activities with regular support provided by a District Manager specializing in such services.

Dietary services consist of managing our customers’ dietary departments, which are principally responsible for food purchasing, meal preparation and professional dietitian services, which include the development of menus that meet the dietary needs of residents. On-site management is responsible for all daily dietary department activities with regular support provided by a District Manager specializing in dietary services. We also offer clinical consulting services to our dietary customers which may be provided as a standalone service or be bundled with other dietary department services. Upon beginning service with a customer facility, we typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise the front-line personnel and coordinate dietitian services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.

~~Housekeeping~~EVS services were provided to approximately 2,~~200~~300 customer facilities at December 31, ~~2024~~2025 and contributed approximately 44.69% or $~~765~~824.47 million of our consolidated revenues for the year ended December 31, ~~2024~~2025. Dietary services were provided to approximately 1,600 customer facilities at December 31, ~~2024~~2025 and contributed approximately 55.41% or $~~950~~1,012.35 million of our consolidated revenues for the year ended December 31, ~~2024~~2025.

Our ability to acquire new customers, retain existing customers and increase revenues are affected by many factors. Competitive factors consist primarily of competing with potential customers’ use of in-house support staff, as well as a number of firms which compete with us in the regional and national markets in which we conduct business. We believe the primary revenue drivers of our business are our ability to obtain new customers and to provide additional services to existing customers. In addition, although there can be no assurance, we seek to pass through, by means of service billing increases, increases in our cost of providing the services, while also aiming to obtain modest ~~annual~~ revenue increases from our existing customers to attain desired profit margins at the facility level. The primary economic factor in acquiring new customers is our ability to demonstrate the cost-effectiveness of our services. The primary operational factor is our ability to demonstrate to potential customers the benefits of being relieved of the administrative and operational challenges related to the day-to-day management of their housekeeping and dietary operations. In addition, we must be able to assure new customers that we can improve the quality of service that they are providing to their residents. We believe the factors discussed above are equally applicable to each of our segments with respect to acquiring new customers and increasing revenues.

Our expenses vary and may impact our operating performance. We review costs of labor, costs of supplies, bad debt expense and depreciation and amortization expense, along with other segment expenses, to evaluate our operating performance. The variability of these costs may impact each segment differently, as EVS’s percentage of revenue is more significantly impacted by costs of labor than that of Dietary, while Dietary’s percentage of revenue is more significantly impacted by costs of supplies than EVS. Bad debt expense impacts costs of services provided for each segment periodically depending on specific customer matters for each segment.

Table of Contents

~~When~~EVS ~~evaluating~~labor ~~financial~~costs ~~performance,~~accounted wefor ~~consider~~approximately ~~the~~78.3% ~~ratio~~of EVS revenues in 2025 while Dietary labor costs accounted for approximately 58.8% of ~~certain~~Dietary ~~financial~~revenues ~~items~~in 2025. Changes in wage rates as a result of legislative or collective bargaining actions, market factors, adjustments to ~~consolidated~~staffing levels and other variations in our use of labor or managing labor costs can result in variability of these costs. Housekeeping supplies, including linen products, accounted for approximately 7.2% of EVS revenues in 2025. ~~The~~In ~~table~~contrast, ~~below~~food ~~summarizes~~supplies ~~those~~consumed ~~metrics~~in performing our Dietary services accounted for ~~2024~~approximately 30.9% of Dietary revenues. Generally, ~~2023~~fluctuations in these expenses are influenced by factors outside of our control and ~~2022:~~ are unpredictable. EVS and Dietary supplies are principally commodity products and are affected by market conditions specific to the respective products.

	Relation to Consolidated Revenues
	Year Ended December 31,
	2024		2023		2022
Revenues	100.0	%	100.0	%	100.0	%
Operating costs and expenses:
Costs of services provided	86.7	%	87.2	%	88.6	%
Selling, general and administrative expense excluding change in deferred compensation liability	10.2	%	9.6	%	8.8	%
Gain on deferred compensation plan	0.5	%	0.4	%	(0.5)	%
Selling, general and administrative expense	10.7	%	10.0	%	8.3	%
Other income (expense):
Investment and other income (loss), net	0.8	%	0.8	%	(0.3)	%
Interest expense	(0.3)	%	(0.5)	%	(0.2)	%
Income before income taxes	3.1	%	3.1	%	2.6	%
Income tax	0.8	%	0.9	%	0.6	%
Net income	2.3	%	2.2	%	2.0	%

Our customers are concentrated in the healthcare industry and are primarily providers of long-term care. Many of our customers’ revenues are highly reliant on Medicare, Medicaid and third-party payers’ reimbursement funding. Legislation can significantly alter overall government reimbursement for nursing home services and such changes, as well as other trends in the long-term care industry, have affected and could adversely affect our customers’ cash flows, resulting in their inability to make payments to us in accordance with agreed-upon payment terms. The climate of legislative uncertainty has posed, and will continue to pose, both risks and opportunities for us. The risks are related to our customers’ cash flows and solvency, while the opportunities are related to our ability to offer our customers cost stability and efficiencies. A large portion of our revenues are derived from nursing home operators whose portfolio of facilities managed are in multiple states, and as such, the ultimate impact, including in terms of timing and scale, as a result of legislative changes can be difficult to predict. However, our customer’s obligation to pay the Company in accordance with the contract is not contingent upon the customer’s cash flow. Notwithstanding the Company’s efforts to minimize its credit risk exposure, the aforementioned factors, as well as other factors that impact customer cash flows or their ability to make timely payments, could have a material adverse effect on the Company’s results of operations and financial condition.

Our expenses can vary and may impact our operating performance. We review costs of labor, costs of supplies, bad debt expense and depreciation and amortization expense, along with other segment expenses, to evaluate our operating performance. The variability of these costs may impact each segment differently, as Housekeeping’s percentage of revenue is more significantly impacted by costs of labor than that of Dietary, while Dietary’s percentage of revenue is is more significantly impacted by costs of supplies than Housekeeping. Bad debt expense impacts costs of services provided for each segment periodically depending on specific customer matters for each segment.

In 2024, we adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. As part of our adoption of ASU 2023-07 and the Chief Operating Decision Maker’s evaluation of segment performance for the year ended December 31, 2024, we updated certain segment information in 2024 and recast certain prior period segment information from 2022 and 2023 in order to conform with our current period segment presentation.

Housekeeping labor costs accounted for approximately 78.4% of Housekeeping revenues in 2024 while Dietary labor costs accounted for approximately 56.6% of Dietary revenues in 2024. Changes in wage rates as a result of legislative or collective bargaining actions, market factors, adjustments to staffing levels and other variations in our use of labor or managing labor costs can result in variability of these costs. Housekeeping supplies, including linen products, accounted for approximately 7.4% of Housekeeping revenues in 2024. In contrast, supplies consumed in performing our Dietary services accounted for approximately 32.5% of Dietary revenues. Generally, fluctuations in these expenses are influenced by factors outside of our control and are unpredictable. Housekeeping and Dietary supplies are principally commodity products and are affected by market conditions specific to the respective products.

Table of Contents

~~Our~~Years ~~customers~~Ended ~~are concentrated in the healthcare industry and are primarily providers of long-term care. Many of our customers’ revenues are highly reliant on Medicare~~December 31, ~~Medicaid~~2025 and ~~third-party~~2024 payers’ reimbursement funding. Legislation can significantly alter overall government reimbursement for nursing home services and such changes, as well as other trends in the long-term care industry, have affected and could adversely affect our customers’ cash flows, resulting in their inability to make payments to us in accordance with agreed-upon payment terms. The climate of legislative uncertainty has posed, and will continue to pose, both risks and opportunities for us: the risks are related to our customers’ cash flows and solvency, while the opportunities are related to our ability to offer our customers cost stability and efficiencies. A large portion of our revenues are derived from nursing home operators whose portfolio of facilities managed are in multiple states, and as such, the ultimate impact, including in terms of timing and scale, as a result of legislative changes can be difficult to predict. However, our customer’s obligation to pay the Company in accordance with the contract is not contingent upon the customer’s cash flow. Notwithstanding the Company’s efforts to minimize its credit risk exposure, the aforementioned factors, as well as other factors that impact customer cash flows or their ability to make timely payments, could have material adverse effect on the Company’s results of operations and financial condition.

~~Years~~The ~~Ended~~following table summarizes the income statement key components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the years ended December 31, ~~2024~~2025 and ~~2023~~ 2024.

The following table summarizes the income statement key components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the years ended December 31, 2024 and 2023.


	Year Ended December 31,
	2025		2024		% Change
	(in thousands)
Revenues
Environmental Services	$	824,681	$	765,368	7.7	%
Dietary	1,012,492		950,314		6.5	%
Consolidated	$	1,837,173	$	1,715,682	7.1	%

Costs of services provided
Environmental Services	$	704,282	$	642,873	9.6	%
Dietary	927,725		844,719		9.8	%
ERC Credits1	(34,239)		—		NR4
Consolidated	$	1,597,768	$	1,487,592	7.4	%

Selling, general & administrative expenses
Environmental Services	$	48,153	$	47,085	2.3	%
Dietary	59,711		59,574		0.2	%
Corporate2	75,741		68,160		11.1	%
Gain on deferred compensation plan investments	7,261		8,241		(11.9)	%
Consolidated	$	190,866	$	183,060	4.3	%

Other income (expense)3
Investment and other income, net	$	20,907	$	14,349	45.7	%
Interest expense	(1,580)		(6,438)		(75.5)	%
Income before taxes	67,866		52,941		28.2	%
Income tax provision3	8,807		13,470		(34.6)	%
Net income	$	59,059	$	39,471	49.6	%

	Year Ended December 31,
	2024		2023 1		% Change
	(in thousands)
Revenues
Housekeeping	$	765,368	$	766,651	(0.2)	%
Dietary	950,314		904,738		5.0	%
Consolidated	$	1,715,682	$	1,671,389	2.7	%
Costs of services provided
Housekeeping	$	642,873	$	648,710	(0.9)	%
Dietary	844,719		807,933		4.6	%
Consolidated	$	1,487,592	$	1,456,643	2.1	%
Selling, general & administrative expense
Housekeeping	$	47,085	$	45,752	2.9	%
Dietary	59,574		52,254		14.0	%
Corporate2	68,160		62,082		9.8	%
Gain on deferred compensation plan investments	8,241		6,684		23.3	%
Consolidated	$	183,060	$	166,772	9.8	%
Other income (expense)3
Investment and other income, net	$	14,349	$	12,938	10.9	%
Interest expense	(6,438)		(7,856)		(18.0)	%
Income before taxes	$	52,941	$	53,056	(0.2)	%
Income tax provision3	13,470		14,670		(8.2)	%
Net income	$	39,471	$	38,386	2.8	%

1.Segment costs of services provided excludes the impact of ERC refunds received by the Company and recorded within income during the year ended December 31, 2025 as the credits relate to payroll tax credits related to 2020 and 2021 payroll.

12.Represents aselling, ~~recast~~general ofand ~~prior~~administrative ~~period~~expenses ~~numbers~~less amounts allocated to ~~conform~~segments ~~with~~for ~~current~~labor ~~period~~and ~~presentation~~labor-related and other segment items.

2.Represents selling, general and administrative expense less amounts allocated to segments for labor and labor-related and other segment items.

3.These line items represent corporate costs not allocated to segments.

4.Not relevant.

Table of Contents

The following table sets forth the ratio of certain items to consolidated revenues for the years ended December 31, 2025 and 2024:


	Year Ended December 31,
	2025		2024
Revenues	100.0	%	100.0	%
Operating costs and expenses:
Costs of services provided	87.0	%	86.7	%
Selling, general and administrative expenses	10.4	%	10.7	%
Other income (expense):
Investment and other income, net	1.2	%	0.8	%
Interest expense	(0.1)	%	(0.3)	%
Income before income taxes	3.7	%	3.1	%
Income tax	0.5	%	0.8	%
Net income	3.2	%	2.3	%

Revenues

Consolidated

Consolidated revenues increased 2.7.1% to $1,837.72 ~~billion~~million for the year ended December 31, ~~2024~~2025 compared to the corresponding period in ~~2023~~2024 as a result of the factors discussed below under Reportable Segments.

Reportable Segments

~~Housekeeping~~EVS revenues ~~decreased~~increased 07.27% while Dietary revenues increased 56.05% during the year ended December 31, ~~2024~~2025 compared to the corresponding period in ~~2023~~2024. ~~Housekeeping~~EVS ~~revenues~~revenue ~~decreased~~increases ~~due~~were todriven aby ~~decline~~an increase in facilities serviced, ~~offset~~and by increases toin ~~costs~~contractual ~~which were passed on to customers~~pricing. Dietary ~~revenues~~revenue ~~increased~~increases ~~resulting~~were ~~from~~driven ~~increases~~by toorganic ~~contractual~~growth ~~pass-throughs~~via ofexpanding ~~labor~~services ~~and~~performed ~~food~~for ~~costs~~existing customers, ~~which have~~ increased ~~due~~pass-through costs to ~~inflation~~customers and ~~market~~increases ~~factors~~in contractual pricing.

Costs of services provided

Consolidated

Consolidated costs of services provided increased 27.14% to $1,597.58 ~~billion~~million for the year ended December 31, ~~2024~~2025 compared to the corresponding period in ~~2023~~2024 as a result of the factors discussed below under Reportable Segments. Costs of services provided, as a percentage of revenues, ~~improved~~was ~~to 86~~87.70% for the year ended December 31, ~~2024~~2025 compared to 8786.27% in the corresponding period in ~~2023~~2024. ~~The~~During ~~Company’s~~the ~~goal~~year isended toDecember ~~manage~~31, ~~consolidated~~2025, we recognized $34.2 million of income, recorded as a reduction to costs of services provided, asrelated ato ~~percentage~~the receipt of ~~revenues~~ERC inrefunds for periods from the ~~86%~~second ~~range~~quarter of 2020 through the second quarter of 2021, and we additionally recognized $63.9 million of bad debt expense within costs of services provided associated with the Genesis bankruptcy.

Reportable Segments

We include certain expenses classified as selling, general and administrative expenses within segment expenses and exclude the benefit from ERC credits from segment performance. Segment expenses for ~~Housekeeping~~EVS, as a percentage of ~~Housekeeping~~EVS revenues, ~~decreased~~increased to 9091.12% for the year ended December 31, ~~2024~~2025 from 90.61% in the corresponding period in ~~2023~~2024. Segment expenses for Dietary, as a percentage of Dietary revenues, increased to 9597.25% for the year ended December 31, ~~2024~~2025 from 95.12% in the corresponding period in ~~2023~~2024.

The following tables provide a comparison of the key indicators we consider when managing segment expenses as a percentage of the respective segment’s revenues:

	Year Ended December 31,
Key Indicators as a % of Segment Revenue - Housekeeping	2024	2023	Change
Labor and other labor-related costs1	78.4%	78.2%	0.2%
Supplies	7.4%	7.6%	(0.2)%
Bad debt expense	1.9%	2.3%	(0.4)%
Depreciation and amortization	0.5%	0.5%	—%
Other costs1	1.9%	2.0%	(0.1)%
Total segment expenses	90.1%	90.6%	(0.5)%

1.Inclusive of certain expenses reported within selling, general and administrative expense that are segment-specific.

	Year Ended December 31,
Key Indicators as a % of Segment Revenue - Dietary	2024	2023	Change
Labor and other labor-related costs1	56.6%	57.7%	(1.1)%
Supplies	32.5%	32.6%	(0.1)%
Bad debt expense	3.4%	2.0%	1.4%
Depreciation and amortization	0.3%	0.4%	(0.1)%
Other costs1	2.4%	2.4%	—%
Total segment expenses	95.2%	95.1%	0.1%

1.Inclusive of certain expenses reported within selling, general and administrative expense that are segment-specific.

Table of Contents

The following tables provide a comparison of the key indicators we consider when managing segment expenses as a percentage of the respective segment’s revenues:


	Year Ended December 31,
Key Indicators as a % of Segment Revenue - EVS	2025	2024	Change
Labor and other labor-related costs1	78.3%	78.4%	(0.1)%
Supplies	7.2%	7.4%	(0.2)%
Bad debt expense	3.5%	1.9%	1.6%
Depreciation and amortization	0.5%	0.5%	—%
Other costs1	1.7%	1.9%	(0.2)%
Total segment expenses	91.2%	90.1%	1.1%

1.Inclusive of certain expenses reported within selling, general and administrative expenses that are segment-specific.


	Year Ended December 31,
Key Indicators as a % of Segment Revenue - Dietary	2025	2024	Change
Labor and other labor-related costs1	58.8%	56.6%	2.2%
Supplies	30.9%	32.5%	(1.6)%
Bad debt expense	5.3%	3.4%	1.9%
Depreciation and amortization	0.4%	0.3%	0.1%
Other costs1	2.1%	2.4%	(0.3)%
Total segment expenses	97.5%	95.2%	2.3%

1.Inclusive of certain expenses reported within selling, general and administrative expenses that are segment-specific.

Variations within these key indicators relate to the provision of services at new facilities, changes in the mix of customers for whom we provide supplies or do not provide supplies and changes in bad debt expense. Management focuses on building efficiencies and managing labor and other costs at the facility level, as well as managing supply chain costs, for new and existing facilities.

InConsolidated ~~2024~~Selling, ~~LaVie~~General ~~Care Centers, LLC~~ and ~~certain~~Administrative affiliated entities (“LaVie”), several of which are customers of the Company, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Georgia. During the year ended December 31, 2024, bad debt provision includes an increase to the allowance for doubtful accounts of $17.6 million associated with LaVie’s bankruptcy. We continue to provide services to LaVie on current terms and are deferring recognition of revenues from ongoing services from LaVie until cash is received. During the year ended December 31, 2023, bad debt provision includes an increase to the allowance for doubtful accounts by $13.8 million arising from two customer groups, one which entered into an assignment for the benefit of creditors and one which entered into bankruptcy.Expenses

Selling, ~~General~~general and ~~Administrative~~administrative ~~Expense~~expenses incurred at a segment-level are discussed in the Reportable Segments section above. Also included in consolidated selling, general and administrative expenses are corporate expenses and gains and losses associated with changes in the value of investments comprising our deferred compensation liability. These investments represent the amounts held on behalf of the participating employees as changes in the value of these investments affect the amount of our deferred compensation liability. Gains on the plan investments during the years ended December 31, 2025 and 2024 increased our total selling, general and administrative expenses.

~~Selling,~~Excluding ~~general~~the ~~and~~change ~~administrative expense incurred at a segment-level is discussed~~ in the ~~Reportable~~deferred ~~Segments~~compensation ~~section~~plan described above., ~~Also included in~~ consolidated selling, general and administrative ~~expense are corporate~~ expenses ~~and~~increased ~~gains~~$8.8 ~~and~~million ~~losses~~or ~~associated~~5.0% ~~with~~for ~~changes in~~ the ~~value~~year ofended ~~investments~~December ~~under~~31, ~~our~~2025 ~~deferred~~compared ~~compensation~~to ~~liability. These investments represent~~ the ~~amounts~~corresponding ~~held~~period ~~on behalf of the participating employees as changes~~ in ~~the value of these investments affect the amount of our deferred compensation liability. Gains on the plan investments during the years ended December 31~~2024, ~~2024~~driven ~~and~~by ~~2023~~ increased ~~our~~payroll ~~total selling, general~~ and ~~administrative~~payroll-related ~~expense~~expenses.

~~Excluding~~The ~~the~~table ~~change~~below insummarizes the ~~deferred~~changes ~~compensation~~in ~~plan~~these ~~described~~components ~~above,~~of ~~consolidated~~ selling, general and administrative expense increased $14.7 million or 9.2% for the year ended December 31, 2024 compared to the corresponding period in 2023. The increase was driven by increases in payroll, legal, travel and fleet-related expenses~~, all of which were impacted by inflationary measures.~~:

The table below summarizes the changes in these components of selling, general and administrative expense:


	Year Ended December 31,
	2025		2024		$ Change		% Change
	(in thousands)
Selling, general and administrative expenses excluding change in deferred compensation liability	$	183,605	$	174,819	$	8,786	5.0	%
Gain on deferred compensation plan investments	7,261		8,241		(980)		(11.9)	%
Selling, general and administrative expenses	$	190,866	$	183,060	$	7,806	4.3	%

	Year Ended December 31,
	2024		2023		$ Change		% Change
	(dollar amounts in thousands)
Selling, general and administrative expense excluding change in deferred compensation liability	$	174,819	$	160,088	$	14,731	9.2	%
Gain on deferred compensation plan investments	8,241		6,684		1,557		23.3	%
Selling, general and administrative expense	$	183,060	$	166,772	$	16,288	9.8	%

Consolidated Investment and Interest Income, net

Investment and other income was a gain of $14.3 million for the year ended December 31, 2024 compared to a gain of $12.9 million for the corresponding 2023 period, primarily due to market fluctuations in the value of our trading security investments representing the funding for our deferred compensation plan and increased interest income on notes receivable.

	Year Ended December 31,
	2024		2023		$ Change		% Change
	(dollar amounts in thousands)
Investment and other income, net excluding change in deferred compensation plan assets	$	6,056	$	6,293	$	(237)	(3.8)	%
Increase in deferred compensation plan assets	8,293		6,645		1,648		24.8	%
Investment and other income, net	$	14,349	$	12,938	$	1,411	10.9	%

Consolidated Interest Expense

Consolidated interest expense decreased to $6.4 million for the year ended December 31, 2024 compared to $7.9 million for the corresponding 2023 period due to decreased short-term borrowings on our line of credit during 2024 compared to 2023.

Table of Contents

Consolidated Investment and Interest Income, net

Investment and other income, net was a gain of $20.9 million for the year ended December 31, 2025 compared to a gain of $14.3 million for the corresponding 2024 period. Included in investment and other income, net was $5.3 million of interest income recognized on ERC refunds received during the year ended December 31, 2025. Excluding the impact of the ERC refund, investment and other income, net increased due to increased interest income from cash, notes, and marketable securities, partially offset by a decline in income from deferred compensation plan investments.


	Year Ended December 31,
	2025		2024		$ Change		% Change
	(in thousands)
Investment and other income, net excluding change in deferred compensation plan assets	$	13,581	$	6,056	$	7,525	124.3	%
Gain on deferred compensation plan investments	7,326		8,293		(967)		(11.7)	%
Investment and other income, net	$	20,907	$	14,349	$	6,558	45.7	%

Consolidated Interest Expense

Consolidated interest expense was $1.6 million for the year ended December 31, 2025 compared to $6.4 million for the corresponding 2024 period as we incurred lower average borrowings on our line of credit during 2025 compared to 2024.

Consolidated Income Taxes

Our effective tax rate was 2513.40% for the year ended December 31, ~~2024~~2025 compared to 2725.74% in ~~2023~~2024. The decrease to our ~~2024~~2025 tax rate compared to the corresponding ~~2023~~2024 period was primarily ~~impacted~~driven by apermanent ~~year-over-year~~tax ~~reduction~~differences inrelated ~~state~~to ~~and~~the ~~local~~our ~~income~~ERC ~~tax expense~~receipts.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in accordance with United States generally accepted accounting standards (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Financial reporting results rely on estimating the effects of matters that are inherently uncertain. An understanding of the policies discussed below is critical to the understanding of our financial statements because the application of these policies requires judgment. Specific risks for these critical accounting policies and estimates are described in the following paragraphs. For these estimates, we caution that future events do not always occur as forecasted, and the best estimates routinely require adjustment. Any such adjustments or revisions to estimates could result in material differences from previously reported amounts.

The policies discussed below are not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP, with no need for our judgment in their application. There are also areas in which our judgment in selecting another available alternative would not produce a materially different result. See our audited consolidated financial statements and notes thereto which are included in this Annual Report on Form 10-K, which contain a discussion of our accounting policies and other disclosures required by U.S. GAAP.

Table of Contents

Allowance for Doubtful Accounts

The allowance for doubtful accounts (the “Allowance”) is established at the origination of an account or note receivable in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) subtopic 326 Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). ASC 326 requires the Company to estimate the lifetime expected credit losses on such instruments and to record an allowance to offset the receivables.

The Allowance is evaluated quarterly ~~based~~in ~~upon~~accordance ~~our~~with ASC 326 and is determined using financial models ~~which~~designed ~~consider~~to estimate lifetime expected credit losses. The models incorporate historical ~~collections~~collection experience, ~~current~~and ~~market~~qualitative ~~conditions,~~adjustments ~~government~~to ~~funding~~factor the effects of ~~Medicare~~current ~~and~~conditions ~~Medicaid~~(including ~~and~~market ~~reasonable~~conditions and ~~supportable~~government ~~economic~~funding ~~forecasts~~of toMedicare ~~estimate~~and ~~lifetime~~Medicaid), ~~expected~~as ~~credit losses~~necessary. Portions of the Allowance are inherently more sensitive to fluctuations in management’s assumptions than others~~, particularly any adjustments made to reflect reasonable and supportable economic forecasts~~. Such qualitative assessments would be expected to have a greater effect on aged accounts receivable and notes receivable as compared to current receivables. Due to the prospective nature of the Allowance under ASC 326, Management continues to review our portfolio of accounts and notes receivable and any estimate of credit losses is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available.

We have had varying collections experience with respect to our accounts and notes receivable. We have at times elected to extend the period of payment for certain customers beyond contractual terms. Such customers include those who have terminated service agreements and slow payers experiencing financial difficulties. In making credit evaluations, in addition to analyzing and anticipating, where possible, the specific cases described above, we consider customer-specific risks as well as the general collection risks associated with trends in the long-term care industry. We establish credit limits through our payment terms, perform ongoing credit evaluations and monitor accounts to minimize the risk of loss.

Despite our efforts to minimize credit risk exposure, our customers could be adversely affected if future industry trends, as more fully discussed under “Liquidity and Capital Resources” below, and in this Annual Report on Form 10-K in Part I under “Government Regulation of Customers,” “Service Agreements and Collections” and “Risk Factors” change in such a manner as to negatively impact the cash flows of our customers. If our customers experience a negative impact in their cash flows, it could have a material adverse effect on our consolidated results of operations and financial condition.

Table of Contents

Accrued Insurance Claims

We self-insure or carry high deductible insurance policies and therefore retain a substantial portion of the risk associated with expected losses under our general liability, workers’ compensation and ~~auto~~other insurance programs, which comprise approximately 2524.48% of our liabilities at December 31, ~~2024~~2025. Under our insurance plans predetermined loss limits are arranged with our insurance company to limit both our per occurrence cash outlay and annual insurance plan cost. Our accounting for this plan utilizes current valuations from a third-party actuary, which include assumptions based on data such as historical claims and payout experience, demographic factors, industry trends, severity factors and other actuarial calculations. In the event that our claims experience and/or industry trends result in an unfavorable change in our assumptions or outcomes, it would have an adverse effect on our results of operations and financial condition. Recently, our claims experiences have been favorable as a result of our ongoing initiative to promote safety and accident prevention in the workplace and proactive management of workers’ compensation claims.

For general liability, workers’ compensation and other self-insurance programs, we record both a reserve for the estimated future cost of claims and related expenses that have been reported but not settled as well as an estimate of claims incurred but not reported. General liability and workers’ compensation reserves for claims incurred but not reported are developed by a third-party actuary through review of our historical data and open claims.

A summary of the changes in our total self-insurance liability is as follows:

	2024		2023		2022
	Year Ended December 31,
	2025		2024		2023
	(in thousands)
Accrued insurance claims - January 1,	$	8477,~~378~~017	$	8884,~~707~~378	$	8988,~~394~~707
Claim payments	(24,~~751~~120)		(24,~~488~~751)		(2524,~~175~~488)
Reserve accruals:
Claim expense	17,616		17,390		20,159
Current year accruals	29,015		32,693		34,293
Accrued insurance claims - December 31,	$	70,513	$	77,017	$	84,378
Changes to the provision for prior year claims	(11,625)		(12,534)		(9,805)
Change in accrued insurance claims	(7,361)		(4,329)		(687)
Accrued insurance claims - December 31,	$	77,017	$	84,378	$	88,707

Liquidity and Capital Resources

Our primary sources of liquidity are available cash and cash equivalents, available lines of credit under our revolving credit facility and cash flows from operating activities. At December 31, 2024, we had cash, cash equivalents, restricted cash equivalents, marketable securities and restricted marketable securities of $135.8 million and working capital of $364.1 million, compared to December 31, 2023 cash, cash equivalents and marketable securities of $147.5 million and working capital of $354.8 million. Our current ratio was 2.9 to 1 at December 31, 2024 and 2.6 to 1 at December 31, 2023. Marketable securities and restricted marketable securities represent fixed income investments that are highly liquid and can be readily purchased or sold through established markets. Such securities are held by HCSG Insurance to satisfy capital requirements of the state regulator related to captive insurance companies.

For the years ended December 31, 2024, 2023 and 2022 our cash flows were as follows:

	Year Ended December 31,
	2024		2023		2022
	(in thousands)
Net cash provided by (used in) operating activities	$	30,802	$	43,498	$	(8,167)
Net cash provided by (used in) investing activities	$	6,047	$	(3,293)	$	2,580
Net cash used in financing activities	$	(31,048)	$	(12,154)	$	(38,928)

Table of Contents

Liquidity and Capital Resources

Our primary sources of liquidity are available cash and cash equivalents, our revolving credit facility and cash flows from operating activities. At December 31, 2025 and 2024, our primary sources of liquidity included the following balances:


		December 31,
		2025		2024
	(in thousands)
Cash and cash equivalents		$	125,189	$	56,776
Restricted cash equivalents		5,577		3,355
Marketable securities, at fair value		42,774		50,535
Restricted marketable securities, at fair value		30,352		25,105
Total		$	203,892	$	135,771

Working capital		$	406,040	$	364,105

Our current ratio was 3.4 to 1 at December 31, 2025 and 2.9 to 1 at December 31, 2024. Marketable securities and restricted marketable securities represent fixed income investments that are highly liquid and can be readily purchased or sold through established markets. Such securities are held by HCSG Insurance to satisfy capital requirements of the state regulator related to captive insurance companies.

For the years ended December 31, 2025, 2024 and 2023 our cash flows were as follows:


	Year Ended December 31,
	2025		2024		2023
	(in thousands)
Net cash from operating activities	$	144,968	$	30,802	$	43,498
Net cash from investing activities	$	(11,003)	$	6,047	$	(3,293)
Net cash from financing activities	$	(63,330)	$	(31,048)	$	(12,154)

Operating Activities

Our primary sources of cash from operating activities are the revenues generated from our ~~Housekeeping~~Environmental Services and Dietary services. Our primary uses of cash from operating activities are the funding of our payroll and other personnel-related costs as well as the costs of supplies used in providing our services. For the year ended December 31, ~~2024~~2025 cash flow from operations included $3959.51 million in net income, an increase of $119.16 million compared to ~~2023~~2024, non-cash add-backs to net income of $61126.5 million (primarily driven by bad debt expense), and a $7040.25 million decrease in cash flows from changes in operating assets and liabilities,. ~~driven~~Included ~~primarily~~within byoperating ~~increased~~cash ~~outstanding~~flows ~~accounts~~were ~~and~~receipts ~~notes~~of ~~receivable.~~ERC ~~Such~~refunds ~~activities~~of ~~are~~$51.8 million, ~~the~~of ~~primary~~which ~~drivers~~$39.6 million ofwas ~~the~~recorded ~~period-over-period~~within ~~changes~~net inincome ~~net~~and ~~cash~~$12.3 million ~~provided~~was byrecorded ~~operating~~as ~~activities.~~Deferred ERC Credits.

Investing Activities

Our principal uses of cash for investing activities are capital expenditures such as housekeeping and food service equipment, computer software and equipment, furniture and fixtures (see “Capital Expenditures” below for additional information), and purchases of marketable securities and restricted marketable securities. Such uses of cash are offset by proceeds from sales of marketable securities. For the year ended December 31, 2025, cash flow from investing activities included $5.8 million in cash used for capital expenditures, $18.7 million in cash used for purchases of marketable securities and restricted marketable securities, and $23.2 million in cash received from sales of marketable securities and restricted marketable securities.

Our investments in marketable securities and restricted marketable securities are primarily comprised of municipal bonds, treasury notes, corporate bonds, and other government bonds and are intended to achieve our goal of preserving principal, maintaining adequate liquidity and maximizing returns subject to our investment guidelines. Our investment policy limits investment to certain types of instruments issued by institutions primarily with investment-grade ratings and places restrictions on concentration by type and issuer.

Table of Contents

Financing Activities

The primary source of cash from financing activities is the net borrowings under our bank line of credit. ~~We borrow for general corporate purposes as needed throughout the year.~~ The primary uses of cash for financing activities are repayments of outstanding line of credit balances and repurchases of common stock. On February 14, 2023, our Board of Directors authorized the repurchase of up to 7.5 million outstanding shares of common stock (the “2023 Repurchase Plan”). We repurchased 4.0 million shares of our common stock for $61.6 million during the year ended December 31, 2025. We repurchased 0.4 million shares of our common stock for $5.0 million during the year ended December 31, 2024. We remain authorized to repurchase 62.0 million shares of our Common Stock pursuant to the 2023 Repurchase Plan.

For the years ended December 31, 2025 and 2024, our quarterly repurchases of common stock were as follows:


Three Months Ended	Total number of shares of Common Stock repurchased	Average price paid per share of Common Stock1		Aggregate purchase price of Common Stock repurchases1		Number of remaining shares authorized for repurchase
	(in thousands, except for per share data)
December 31, 2025	1,078	$	18.19	$	19,604	2,033
September 30, 2025	1,743	$	15.64	$	27,271	3,111
June 30, 2025	523	$	14.73	$	7,706	4,854
March 31, 2025	653	$	10.77	$	7,036	5,377
December 31, 2024	90	$	11.08	$	997	6,030
September 30, 2024	94	$	10.60	$	996	6,120
June 30, 2024	263	$	11.29	$	2,981	6,214
March 31, 2024	—	$	—	$	—	6,477

1.Includes amounts for commissions and taxes.

Contractual Obligations

Our future contractual obligations and commitments at December 31, ~~2024~~2025 primarily consist of minimum lease payments on our operating lease agreements as discussed within Note 78 — Leases. As of December 31, ~~2024~~2025, the Company had no other material minimum purchase or capital expenditure commitments pertaining to our daily operations or existing financing arrangements.

Line of Credit

At December 31, ~~2024~~2025, we had a $300 million bank line of credit on which to draw for general corporate purposes. Amounts drawn under the line of credit are payable upon demand and generally bear interest at a floating rate, based on our leverage ratio, and starting at the Term Secured Overnight Financing Rate (“SOFR”) rate plus 165 basis points. The Company’s line of credit was amended on November 22, 2022 to, among other things, provide for a five-year unsecured revolving loan facility in the aggregate amount of $300 million ~~with, at the Company’s option, the ability to increase the revolving loan commitments to an aggregate amount not to exceed $500 million~~ and to change the benchmark rate from the London Interbank Offered Rate (“LIBOR”) to SOFR. At December 31, ~~2024~~2025, we had no borrowings under the line of credit.

26The line of credit requires us to satisfy two financial covenants. The covenants and their respective status at December 31, 2025 were as follows:

Table of Contents


Covenant Descriptions and Requirements						As of December 31, 2025
Funded debt1 to EBITDA2 ratio: less than 3.50 to 1.00						0.15
EBITDA2 to Interest Expense ratio: not less than 3.00 to 1.00						59.44

The line of credit requires us to satisfy two financial covenants. The covenants and their respective status at December 31, 2024 were as follows:

Covenant Descriptions and Requirements						As of December 31, 2024
Funded debt1 to EBITDA2 ratio: less than 3.50 to 1.00						0.21
EBITDA2 to Interest Expense ratio: not less than 3.00 to 1.00						11.71

1.All indebtedness for borrowed money including, but not limited to, reimbursement obligations in respect of letters of credit and guarantees of any such indebtedness.

2.Net income plus interest expense, income tax expense, depreciation, amortization, share-based compensation expense and extraordinary non-recurring losses/gains.

As noted above, we were in compliance with our financial covenants at December 31, ~~2024~~2025 and we expect to remain in compliance. The line of credit expires on November 22, 2027. We believe that our existing capacity under the line of credit and our history of favorable operating cash flows provide adequate liquidity to fund our operations for the next twelve months following the date of this report.

At December 31, 2024 and 2023, we also had outstanding $50.8 million and $85.9 million, respectively, in irrevocable standby letters of credit, which relate to payment obligations under our insurance programs. In connection with the issuance of the letters of credit, the amounts available under the line of credit was reduced by $50.8 million to $249.2 million at December 31, 2024 and by $85.9 million to $189.1 million at December 31, 2023. On December 24, 2024, January 16, 2025 and January 22, 2025, the letters of credit were renewed, and they all expire during the first quarter of 2026.27

~~Accounts~~Table ~~and~~of ~~Notes Receivable~~Contents

At December 31, 2025 and 2024, we had outstanding $47.7 million and $50.8 million, respectively, in irrevocable standby letters of credit, which relate to payment obligations under our insurance programs. In connection with the issuance of the letters of credit, the amount available under the line of credit was reduced by $47.7 million to $252.3 million at December 31, 2025 and by $50.8 million to $249.2 million at December 31, 2024. On January 8, 2025, October 6, 2025, and January 20, 2026, the letters of credit were renewed, and they all expire during the first quarter of 2027.

Accounts and Notes Receivable, Net

Decisions to grant or to extend credit to customers are made on a case-by-case basis and based on a number of qualitative and quantitative factors related to the particular customer as well as the general risks associated with operating within the healthcare industry. Fluctuations in net accounts and notes receivable are attributable to a variety of factors including, but not limited to, the timing of cash receipts from customers, the Company’s assessment of collectability and corresponding provision for bad debt expense and the inception, transition, modification or termination of customer relationships.

We deploy significant resources and have invested in tools and processes to optimize our credit and collections efforts. When appropriate, the Company utilizes interest-bearing promissory notes to enhance the collectability of amounts due, by instituting definitive repayment plans and providing a means by which to further evidence the amounts owed. In addition, the Company may amend contracts from full service to management-only arrangements, or adjust contractual payment terms, to accommodate customers who have in good faith established clearly-defined plans for addressing cash flow issues. These efforts are intended to minimize the Company’s collections risk.

In order to provide for collections issues and the general risk associated with the granting of credit terms, we recorded a bad debt provision (in an Allowance for Doubtful Accounts) of $4683.81 million, $3546.68 million and $3235.06 million in the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively. As a percentage of total revenues, these provisions represented approximately 24.75%, 2.17% and 12.91% for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, respectively.

Insurance Programs

We self-insure or carry high deductible insurance plans and therefore retain a substantial portion of the risk associated with the expected losses under our general liability, workers’ compensation and ~~auto~~other insurance programs. Under our insurance plans for general liability, ~~and~~ workers’ compensation and other programs, predetermined loss limits are arranged with our insurance company to limit both our per occurrence cash outlay and annual insurance plan cost. Our accounting for this plan is affected by various uncertainties, such as historical claims, pay-out experience, demographic factors, industry trends, severity factors and other actuarial assumptions calculated by a third-party actuary. Evaluations of our accrued insurance claims estimate as of the balance sheet date are based primarily on current information derived from our actuarial valuation which assists in quantifying and valuing these trends. In the event that our claims experience and/or industry trends result in an unfavorable change resulting from, among other factors, the severity levels of reported claims and medical cost inflation, as compared to historical claim trends, it would have an adverse effect on our results of operations and financial condition.

For general liability, workers’ compensation and ~~auto~~other insurance programs, we record a reserve for the estimated future cost of claims and related expenses that have been reported but not settled, including an estimate of claims incurred but not reported that are developed as a result of a review of our historical data and open claims, which is based on estimates provided by a third-party actuary.

Table of Contents

Capital Expenditures

The level of capital expenditures is generally dependent on the number of new customers obtained. Such capital expenditures primarily consist of housekeeping and food service equipment purchases, laundry and linen equipment installations, computer hardware and software and furniture and fixtures. Our capital expenditures totaled $65.38 million in ~~2024~~2025. Although we have no specific material commitments for capital expenditures through the end of calendar year ~~2025~~2026, we estimate that for ~~2025~~2026 we will have capital expenditures of approximately $5.0 million to $7.0 million.

Although there can be no assurance, we believe that our cash from operations, existing cash and cash equivalents balance and credit line will be adequate for the foreseeable future to satisfy the needs of our operations and to fund our anticipated growth. However, should these sources not be sufficient, we would seek to obtain necessary capital from such sources as long-term debt or equity financing. In addition, there can be no assurance of the terms thereof and any subsequent equity financing sought may have dilutive effects on our current shareholders.

Material Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements other than our irrevocable standby letters of credit previously discussed.

Table of Contents

Material Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements other than our irrevocable standby letters of credit previously discussed.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

At December 31, ~~2024~~2025, we had $~~135~~203.89 million in cash, cash equivalents, restricted cash equivalents, marketable securities and restricted marketable securities. The fair value of all of our cash equivalents and marketable securities ~~are~~is determined based on “Level 1” or “Level 2” inputs, which are based upon quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market. We place our cash investments in instruments that meet credit quality standards as specified in our investment policy guidelines.

Investments in both fixed-rate and floating-rate investments carry a degree of interest rate risk. The market value of fixed rate securities may be adversely impacted by an increase in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates or if there is a decline in the fair value of our investments.

Table of Contents

Item 8. Financial Statements and Supplementary Data.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

			Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248)			31
Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 2024 and 2023			34
Consolidated Balance Sheets as of December 31, 2025 and 2024			34
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022			35
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023			35
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022			36
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023			36
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024, 2023 and 2022			37
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023			37
Notes to Consolidated Financial Statements for the Years Ended December 31, 2024, 2023 and 2022			38
Notes to Consolidated Financial Statements for the Years Ended December 31, 2025, 2024 and 2023			38

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Healthcare Services Group, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Healthcare Services Group, Inc. (a Pennsylvania corporation) and subsidiaries (the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, ~~2024~~2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2024~~2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, ~~2024~~2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 1413, ~~2025~~2026 expressed an unqualified opinion.

Change in accounting principle

As discussed in Notes 1 and 12 to the consolidated financial statements, the Company has adopted new accounting guidance in 2024 related to the disclosure of segment information in accordance with Accounting Standards Update 2023-07, Segment Reporting (Topic 280). The adoption was retrospectively applied to 2023 and 2022.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for doubtful accounts

As described further in Notes 1 and 45 to the consolidated financial statements, the Company records an allowance for doubtful accounts against its accounts and notes receivable balances ~~under ASC 326~~ based on the future expected credit ~~loss~~losses. This estimate is determined based on internally developed qualitative and quantitative factors derived from the aging and collection history of receivables. We identified the allowance for doubtful accounts as a critical audit matter.

The principal consideration for our determination that the allowance for doubtful accounts is a critical audit matter is that the assumptions utilized by management require significant judgment and result in a high degree of estimation uncertainty. The subjectivity of the estimate increases the level of auditor judgment and effort to evaluate management’s assumptions, including the determination of risk pools, the application of historical loss rates as an indicator of future losses, and the determination of qualitative adjustments. Further, changes in these assumptions and judgments could have a significant impact on the recorded allowance.

Table of Contents

The principal consideration for our determination that the allowance for doubtful accounts is a critical audit matter is that the inputs and assumptions utilized by management require significant judgment and results in a high degree of estimation uncertainty. The subjectivity of the estimate increases the level of auditor judgment and effort to evaluate management’s assumptions, including the determination of risk pools, the application of historical loss rates as an indicator of future losses, and determination of qualitative adjustments. Further, changes in these assumptions and judgments could have a significant impact on the recorded allowance.

Our audit procedures related to the allowance for doubtful accounts included the following, among others:

•We tested the design and operating effectiveness of management’s controls ~~over~~to review the allowance for doubtful accounts, including the methods used to develop the allowance for doubtful accounts and the significant assumptions used.

•We evaluated the appropriateness of ~~management’s~~the ~~process~~methods ~~and~~used ~~methodology~~by ofmanagement ~~estimating~~to develop the allowance for doubtful accounts, including the identification of risk pools.

•We performed a historical lookback analysis for a sample of accounts and notes receivable balances within certain risk pools, ~~examined current~~ and ~~historical collection rates, and~~ compared the historical loss rates against the estimated loss rates within the respective risk pools as of December 31, ~~2024~~2025.

•We evaluated the reasonableness of ~~certain~~ qualitative adjustments recorded by management against the allowance for doubtful accounts to appropriately reflect management’s expectation of current expected credit losses.

•We tested the mathematical accuracy of management’s allowance for doubtful accounts calculation as of December 31, ~~2024~~2025, by recalculating the historical loss rates for each risk pool, asthe ~~well~~aging asof ~~recalculating~~receivables, and the ~~aging~~future ofexpected ~~receivables~~credit losses for each risk pool.

•We ~~sampled~~tested ~~accounts~~the accuracy and ~~notes~~completeness ~~receivable~~of ~~and~~the ~~performed~~aging ~~confirmation~~of ~~procedures,~~accounts asand ~~well~~notes asreceivable ~~obtained~~utilized ~~other~~by ~~corroborating~~management ~~evidence,~~ to ~~ensure~~calculate the ~~accuracy~~allowance offor ~~the~~doubtful ~~receivables~~accounts ~~utilized~~at December 31, 2025 by ~~management~~performing toprocedures ~~calculate~~that ~~the~~included ~~allowance~~confirmation procedures for ~~doubtful~~a ~~accounts~~sample as of ~~December~~accounts ~~31,~~and ~~2024~~notes receivable.

/s/ GRANT THORNTON LLP We have served as the Company’s auditor since 1992. Philadelphia, Pennsylvania February 1413, ~~2025~~2026

Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Healthcare Services Group, Inc.

Opinion on internal control over financial reporting

We have audited the internal control over financial reporting of Healthcare Services Group, Inc. (a Pennsylvania corporation) and subsidiaries (the “Company”) as of December 31, ~~2024~~2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2024~~2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, ~~2024~~2025, and our report dated February 1413, ~~2025~~2026 expressed an unqualified opinion on those financial statements.

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP Philadelphia, Pennsylvania February 1413, ~~2025~~2026

Table of Contents

Healthcare Services Group, Inc.

Consolidated Balance Sheets

(in thousands, except per share amounts)

	As of December 31,
	2024		2023
	2025		2024
ASSETS:
Current assets:
Cash and cash equivalents	$	56125,~~776~~189	$	5456,~~330~~776
Restricted cash equivalents	35,~~355~~577		—3,355
Marketable securities, at fair value	5042,~~535~~774		9350,~~131~~535
Restricted marketable securities, at fair value	2530,~~105~~352		—25,105
Accounts receivable, less allowance for doubtful accounts of $87,520 and $80,817 as of December 31, 2024 and 2023, respectively	330,907		344,864
Accounts receivable (less allowances: $119,305 and $87,520)	281,303		330,907
Notes receivable — short–term portion, less allowance for doubtful accounts of $10,372 and $6,433 as of December 31, 2024 and 2023, respectively	51,429		38,645
Notes receivable — short–term portion (less allowances: $25,931 and $10,372)	31,243		51,429
Inventories and supplies	16,~~749~~797		1816,~~479~~749
Prepaid expenses and other assets	21,796		22,247
Income taxes receivable	22,246		—
Total current assets	556,652		571,696
Prepaid expenses and other current assets	20,934		21,796
Property and equipment, net	28,198		28,774
Total current assets	576,415		556,652
Goodwill	75,529		75,529
Property and equipment, net	27,586		28,198
Other intangible assets, less accumulated amortization of $39,242 and $36,557 as of December 31, 2024 and 2023, respectively	9,442		12,127
Goodwill	79,797		75,529
Notes receivable — long–term portion, less allowance for doubtful accounts of $2,890 and $4,449 as of December 31, 2024 and 2023, respectively	41,054		24,832
Other intangible assets (less accumulated amortization of $42,931 and $39,242)	6,964		9,442
Deferred compensation funding, at fair value	49,639		40,812
Notes receivable — long–term portion (less allowances: $1,776 and $2,890)	25,209		41,054
Deferred tax assets	38,170		35,226
Deferred compensation funding, at fair value	55,909		49,639
Other long-term assets	4,088		1,656
Deferred tax assets	18,472		38,170
Total assets	$	802,772	$	790,652
Other long-term assets	3,901		4,088
Total assets	$	794,253	$	802,772
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	8177,~~147~~382	$	8381,~~224~~147
Accrued payroll and related taxes	5131,~~579~~400		5651,~~142~~579
Other accrued expenses and current liabilities	2437,~~783~~222		2126,~~179~~282
Borrowings under line of credit	—		25,000
Income taxes payable	—		8,391
Income taxes payable	8,391		7,201
Accrued insurance claims	24,371		25,148
Deferred compensation liability — short-term	1,499		1,501
Total current liabilities	170,375		192,547
Accrued insurance claims	25,148		22,681
Accrued insurance claims — long-term	46,142		51,869
Total current liabilities	192,547		216,928
Deferred compensation liability — long-term	56,276		50,011
Accrued insurance claims — long-term	51,869		61,697
Lease liability — long-term	9,659		8,033
Deferred compensation liability — long-term	50,011		41,186
Other long-term liabilities	1,591		385
Lease liability — long-term	8,033		11,235
Commitments and contingencies (Note 17)
Other long-term liabilities	385		2,990
Commitments and contingencies (Note 14)
STOCKHOLDERS’ EQUITY:
Common stock, $0.01 par value; 200,000 and 100,000 shares authorized as of December 31, 2024 and 2023, respectively; 76,533 and 76,329 shares issued, and 73,203 and 73,341 shares outstanding as of December 31, 2024 and 2023, respectively	765		763
Common stock, $0.01 par value; 200,000 shares authorized; 76,821 and 76,533 shares issued, and 69,596 and 73,203 shares outstanding	768		765
Additional paid-in capital	~~318~~327,~~363~~956		~~310~~318,~~436~~363
Retained earnings	~~224~~283,~~556~~668		~~185~~224,~~010~~556
Accumulated other comprehensive loss, net of taxes	(~~2,317~~448)		(12,~~844~~317)
Common stock in treasury, at cost, 3,330 and 2,988 shares as of December 31, 2024 and 2023, respectively	(41,440)		(37,749)
Common stock in treasury, at cost; 7,225 and 3,330 shares	(101,734)		(41,440)
Total stockholders’ equity	$510,210	~~499,927~~	$499,927	~~456,616~~
Total liabilities and stockholders’ equity	$	~~802~~794,~~772~~253	$	~~790~~802,~~652~~772

See accompanying notes to consolidated financial statements.

Table of Contents

Healthcare Services Group, Inc.

Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

	Years Ended December 31,
	2024		2023		2022
	2025		2024		2023
Revenues	$	1,~~715~~837,~~682~~173	$	1,~~671~~715,~~389~~682	$	1,~~690~~671,~~176~~389
Operating costs and expenses:
Costs of services provided	1,~~487~~597,~~592~~768		1,~~456~~487,~~643~~592		1,~~496~~456,~~865~~643
Selling, general and administrative expense	183,060		166,772		140,344
Selling, general and administrative expenses	190,866		183,060		166,772
Other income (expense):
Investment and other income (loss), net	14,349		12,938		(5,427)
Investment and other income, net	20,907		14,349		12,938
Interest expense	(61,~~438~~580)		(76,~~856~~438)		(27,~~987~~856)
Income before taxes	5267,~~941~~866		5352,~~056~~941		4453,~~553~~056
Income tax provision	138,~~470~~807		1413,~~670~~470		1014,~~310~~670
Net income	$	3959,~~471~~059	$	3839,~~386~~471	$	3438,~~243~~386
Per share data:
Basic earnings per common share	$	0.5482	$	0.5254	$	0.4652
Diluted earnings per common share	$	0.5381	$	0.5253	$	0.4652
Weighted average number of common shares outstanding:
Basic	7372,~~754~~380		7473,~~288~~754		74,~~336~~288
Diluted	73,~~988~~032		7473,~~340~~988		74,~~351~~340
Comprehensive income:
Net income	$	3959,~~471~~059	$	3839,~~386~~471	$	3438,~~243~~386
Other comprehensive (loss) income
Other comprehensive income (loss)
Unrealized (loss) gain on available-for-sale marketable securities, net of taxes	(473)		1,633		(7,477)
Unrealized gain (loss) on available-for-sale marketable securities, net of taxes	1,869		(473)		1,633
Total comprehensive income	$	3860,~~998~~928	$	4038,~~019~~998	$	2640,~~766~~019

See accompanying notes to consolidated financial statements.

Table of Contents

Healthcare Services Group, Inc.

Consolidated Statements of Cash Flows

(in thousands)

	Years Ended December 31,
	2024		2023		2022
	2025		2024		2023
Cash flows from operating activities:
Net income	$	3959,~~471~~059	$	3839,~~386~~471	$	3438,~~243~~386
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization	1416,~~585~~778		14,~~344~~585		1514,~~316~~344
Bad debt provision	4683,~~760~~079		3546,~~604~~760		3135,~~969~~604
Deferred income taxes	(219,~~944)~~202		(42,~~820~~944)		(4,~~907~~820)
Share-based compensation expense	912,~~165~~005		89,~~985~~165		98,~~214~~985
Amortization of premium on marketable securities	~~1,504~~295		21,~~144~~504		2,~~219~~144
Unrealized gain on deferred compensation fund investments	(87,~~168~~326)		(68,~~645~~168)		9(6,~~422~~645)
Changes in other long-term liabilities	(~~564~~384)		(~~1,154~~564)		(21,~~353~~154)
Net loss on disposals of property and equipment	~~654~~422		~~818~~654		~~1,138~~818
Share of losses from equity method investment	532		—		—
Share of loss from equity method investment	2,386		532		—
Changes in operating assets and liabilities:
Accounts and notes receivable	~~(61~~5,~~809)~~227		(7461,~~559~~809)		(7874,~~707~~559)
Inventories and supplies	~~1,731~~(48)		21,~~685~~731		42,~~851~~685
Prepaid expenses and other assets	~~704~~2,623		~~12,750~~704		912,~~935~~750
Deferred compensation funding	~~(534)~~318		(~~674~~534)		~~3,913~~(674)
Accounts payable and other accrued expenses	(9,741)		7,430		(13,748)
Accounts payable and other accrued expenses and current liabilities	(12,064)		(9,741)		7,430
Accrued payroll, accrued and withheld payroll taxes	(3,573)		4,186		(23,859)
Deferred ERC Credits	12,277		—		—
Income taxes payable	1,190		572		2,184
Accrued payroll and related taxes	(19,162)		(3,573)		4,186
Accrued insurance claims	(7,362)		(4,329)		(687)
Income taxes receivable (payable)	(30,637)		1,190		572
Deferred compensation liability	9,201		7,775		(18,124)
Accrued insurance claims	(6,503)		(7,362)		(4,329)
Net cash provided by (used in) operating activities	30,802		43,498		(8,167)
Deferred compensation liability	7,421		9,201		7,775
Net cash from operating activities	144,968		30,802		43,498
Cash flows from investing activities:
Disposals of property and equipment	211		121		393
Proceeds from disposals of property and equipment	105		211		121
Additions to property and equipment	(65,~~336~~818)		(56,~~406~~336)		(5,~~210~~406)
Acquisition of equity method investment	(2,750)		—		—
Cash paid for acquisition	(7,153)		—		—
Purchases of marketable securities	(52,090)		—		(2,875)
Cash paid for investments	(2,625)		(2,750)		—
Sales of marketable securities	67,012		1,992		10,386
Purchases of marketable securities	(18,717)		(52,090)		—
Cash paid for acquisitions	—		—		(114)
Sales of marketable securities	23,205		67,012		1,992
Net cash provided by (used in) investing activities	6,047		(3,293)		2,580
Net cash from investing activities	(11,003)		6,047		(3,293)
Cash flows from financing activities:
Dividends paid	—		—		(63,373)
Purchases of treasury stock	(61,586)		(5,018)		(11,283)
Reissuance of treasury stock pursuant to Dividend Reinvestment Plan	—		—		106
Repayments of short-term borrowings	—		(25,000)		—
Proceeds from the exercise of stock options	—		—		410
Payments of statutory withholding on net issuance of common stock	(1,744)		(1,030)		(871)
Purchases of treasury stock	(5,018)		(11,283)		—
Net cash from financing activities	(63,330)		(31,048)		(12,154)
(Repayments of) proceeds from short-term borrowings	(25,000)		—		25,000
Net increase in cash, cash equivalents, and restricted cash equivalents	70,635		5,801		28,051
Payments of statutory withholding on net issuance of restricted stock units	(1,030)		(871)		(1,071)
Cash, cash equivalents and restricted cash equivalents at beginning of the period	60,131		54,330		26,279
Net cash used in financing activities	(31,048)		(12,154)		(38,928)
Cash, cash equivalents and restricted cash equivalents at end of the period	$	130,766	$	60,131	$	54,330
Net increase (decrease) in cash, cash equivalents, and restricted cash equivalents	5,801		28,051		(44,515)
Cash, cash equivalents and restricted cash equivalents at beginning of the period	54,330		26,279		70,794
Cash, cash equivalents and restricted cash equivalents at end of the period	$	60,131	$	54,330	$	26,279
Supplementary cash flow information:
Cash paid for interest	$	61,~~491~~680	$	76,~~809~~491	$	27,~~822~~809
Cash paid for income taxes	$	15,232	$	5,585	$	3,309

See accompanying notes to consolidated financial statements.

Table of Contents

Healthcare Services Group, Inc.

Consolidated Statements of Stockholders’ Equity

(in thousands)

	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income, net of Taxes		Retained Earnings		Treasury Stock		Stockholders’ Equity
	Shares	Amount
Balance, January 1, 2022	76,009	$	760	$	294,124	$	4,000	$	176,451	$	(30,164)	$	445,171
Balance, January 1, 2023	76,161	$	762	$	302,304	$	(3,477)	$	146,602	$	(27,912)	$	418,279
Net income	—	—		—		—		34,243		—		34,243
Unrealized loss on available-for-sale marketable securities, net of taxes	—	—		—		(7,477)		—		—		(7,477)
Shares issued in connection with equity incentive plans, net of taxes	148	2		(663)		—		—		—		(661)
Share-based compensation expense	—	—		9,044		—		—		—		9,044
Shares issued for Deferred Compensation Plan, net	—	—		(634)		—		—		1,008		374
Shares issued for Employee Stock Purchase Plan	—	—		368		—		—		1,144		1,512
Dividends paid and accrued, $0.86 per share	—	—		—		—		(64,092)		—		(64,092)
Shares issued pursuant to Dividend Reinvestment Plan	—	—		6		—		—		100		106
Other	4	—		59		—		—		—		59
Balance, December 31, 2022	76,161	$	762	$	302,304	$	(3,477)	$	146,602	$	(27,912)	$	418,279
Net income	—	—		—		—		38,386		—		38,386
Unrealized gain on available-for-sale marketable securities, net of taxes	—	—		—		1,633		—		—		1,633
Shares issued in connection with equity incentive plans, net of taxes	167	1		(871)		—		—		—		(870)
Share-based compensation expense	—	—		8,836		—		—		—		8,836
Purchases of treasury stock	—	—		—		—		—		(11,283)		(11,283)
Shares issued for Deferred Compensation Plan, net	—	—		298		—		—		172		470
Shares issued for Employee Stock Purchase Plan	—	—		(139)		—		—		1,274		1,135
Other	1	—		8		—		22		—		30
Balance, December 31, 2023	76,329	$	763	$	310,436	$	(1,844)	$	185,010	$	(37,749)	$	456,616
Net income	—	—		—		—		39,471		—		39,471
Unrealized loss on available-for-sale marketable securities, net of taxes	—	—		—		(473)		—		—		(473)
Shares issued in connection with equity incentive plans, net of taxes	204	2		(1,032)		—		—		—		(1,030)
Share-based compensation expense	—	—		8,919		—		—		—		8,919
Purchases of treasury stock	—	—		—		—		—		(5,018)		(5,018)
Shares issued for Deferred Compensation Plan, net	—	—		256		—		—		122		378
Shares issued for Employee Stock Purchase Plan	—	—		(216)		—		—		1,205		989
Other	—	—		—		—		75		—		75
Balance, December 31, 2024	76,533	$	765	$	318,363	$	(2,317)	$	224,556	$	(41,440)	$	499,927
Net income	—	—		—		—		59,059		—		59,059
Unrealized gain on available-for-sale marketable securities, net of taxes	—	—		—		1,869		—		—		1,869
Shares issued in connection with equity incentive plans, net of taxes	288	3		(1,750)		—		—		—		(1,747)
Share-based compensation expense	—	—		11,195		—		—		—		11,195
Purchases of treasury stock	—	—		—		—		—		(61,586)		(61,586)
Shares issued for Deferred Compensation Plan, net	—	—		366		—		—		203		569
Shares issued for Employee Stock Purchase Plan	—	—		(218)		—		—		1,089		871
Other	—	—		—		—		53		—		53
Balance, December 31, 2025	76,821	$	768	$	327,956	$	(448)	$	283,668	$	(101,734)	$	510,210

See accompanying notes to consolidated financial statements.

Table of Contents

Healthcare Services Group, Inc.

Notes to Consolidated Financial Statements

Years Ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023

Note 1 — Description of Business and Significant Accounting Policies

Nature of Operations

Healthcare Services Group, Inc. (the “Company”) provides management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of the healthcare industry, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the United States. Although the Company does not directly participate in any government reimbursement programs, the Company’s customers receive government reimbursements related to Medicare and Medicaid. Therefore, they are directly affected by any legislation relating to Medicare and Medicaid reimbursement programs.

The Company provides services primarily pursuant to full service agreements with its customers. In such agreements, the Company is responsible for the day-to-day management of employees located at the customers’ facilities, as well as for the provision of certain supplies. The Company also provides services on the basis of management-only agreements for a limited number of customers. In a management-only agreement, the Company provides management and supervisory services while the customer facility retains payroll responsibility for the non-supervisory staff. The agreements with customers typically provide for a renewable service term, cancellable by either party upon 30 to 90 days’ notice after an initial period of 60 to 120 days.

The Company is organized into two reportable segments: housekeeping, laundry, linen and other services (“~~Housekeeping~~Environmental Services” or “EVS”), and dietary department services (“Dietary”).

~~Housekeeping~~Environmental Services consists of managing the customers’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of a customer’s facility, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at a customer facility.

Dietary consists of managing the customers’ dietary departments, which are principally responsible for food purchasing, meal preparation and dietitian professional services, which includes the development of menus that meet residents’ dietary needs.

Principles of Consolidation

The financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and with the rules and regulations of the SEC, specifically Regulation S-X and the instructions to Form 10-K. Unless otherwise indicated, all references to years are to the Company’s fiscal year, which ends on December 31.

The accompanying Consolidated Financial Statements include the accounts of Healthcare Services Group, Inc. and its wholly-owned subsidiaries. All ~~significant~~ intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates in Financial Statements

In preparing financial statements in conformity with U.S. GAAP, estimates and assumptions are made that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates. Significant estimates are used in determining, but are not limited to, the Company’s allowance for doubtful accounts, accrued insurance claims, deferred taxes and reviews for potential impairment. The estimates are based upon various factors including current and historical trends, as well as other pertinent industry and regulatory authority information. Management regularly evaluates this information to determine if it is necessary to update the basis for its estimates and to adjust for known changes.

Fair Value of Financial Instruments

The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs (Levels 1 and 2) and minimize the use of unobservable inputs (Level 3) within the fair value hierarchy.

Table of Contents

Fair Value of Financial Instruments

Assets and liabilities are classified within the fair value hierarchy based on the lowest level (least observable) input that is significant to the measurement in its entirety.

While unobservable inputs reflect the Company’s market assumptions, preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets;

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable; and

Level 3 – Significant inputs to the valuation model are unobservable

The Company’s financial instruments that are measured at fair value on a recurring basis consist of marketable securities, ~~and~~restricted ~~the~~marketable securities and deferred compensation fund investments. The carrying value of other financial instruments such as cash and cash equivalents, restricted cash equivalents, accounts and short-term notes receivable, accounts payable ~~(including~~and ~~income~~all ~~taxes~~other ~~payable~~current ~~and~~ accrued ~~expenses)~~liabilities ~~and borrowings under the Company’s line of credit~~ approximate their fair values at December 31, ~~2024~~2025 and ~~2023~~2024, due to the short period of time to maturity or repayment.

Cash and Cash Equivalents and Restricted Cash Equivalents

Cash and cash equivalents and restricted cash equivalents are held in U.S. financial institutions or in custodial accounts with U.S. financial institutions. Cash equivalents are defined as short-term, highly liquid investments with a maturity of three months or less at time of purchase that are readily convertible into cash and have insignificant interest rate risk. The Company currently has bank deposits with financial institutions in the U.S. that exceed FDIC insurance limits.

The following table provides a reconciliation of cash and cash equivalents and restricted cash equivalents reported within the Consolidated Balance Sheets to the amount reported in the Consolidated Statements of Cash Flows.

December 31, 2024

December 31, 2023

December 31, 2022

December 31, 2025

December 31, 2024

December 31, 2023

(in thousands)

Cash and cash equivalents

56125,~~776~~189

5456,~~330~~776

2654,~~279~~330

Restricted cash equivalents1

35,~~355~~577

—3,355

—

Total cash and cash equivalents and restricted cash equivalents

60130,~~131~~766

5460,~~330~~131

2654,~~279~~330

1.OnRestricted ~~February~~cash 2,equivalents ~~2024,~~represent ~~the~~funds ~~Company~~held ~~entered~~in ~~into~~money market accounts pursuant to a Collateral Trust Agreement with the Company’s third-party insurer and a trustee whereby investments or money market funds are held in a trust account to benefit the insurer and are restricted for that purpose. ~~Restricted cash equivalents represent funds invested in money market accounts as of December 31, 2024.~~ The trust account was set up in conjunction with a reduction in the Company’s letters of credit collateral obligation for insurance obligations.

Investments in Marketable Securities and Restricted Marketable Securities

Marketable securities are defined as fixed income investments which are highly liquid and can be readily purchased or sold through established markets. As of December 31, ~~2024~~2025 and ~~2023~~2024, the Company had marketable securities of $7573.61 million and $9375.16 million, respectively, comprised primarily of municipal bonds, U.S. treasury bonds, corporate bonds and other government bonds. These investments are accounted for as available-for-sale securities and are reported at fair value on the Company's Consolidated Balance Sheets. For the ~~year~~years ended December 31, 2025, 2024 and 2023, $01.59 million of unrealized ~~losses related to these investments were recorded in Other comprehensive (loss) income. For the years ended December 31~~gains, ~~2023 and 2022,~~ $10.65 million of unrealized ~~gains~~losses and $71.56 million of unrealized ~~losses~~gains related to these marketable securities were recorded in Other comprehensive income (loss) ~~income~~, respectively in the Company’s Consolidated Statements of Comprehensive Income. Unrealized gains and losses are recorded net of income taxes, with any income tax provision or benefit recorded once gains and losses are recognized.

These assets are held by the Company’s wholly-owned captive insurance company subsidiary as required by state insurance regulations. The Company’s investment policy is intended to manage the assets to achieve the goals of preserving principal, maintaining adequate liquidity at all times and maximizing returns subject to investment guidelines. The investment policy limits investment to certain types of instruments issued by institutions primarily with investment grade credit ratings and places restrictions on concentration by type and issuer.

Table of Contents

~~The~~These ~~Company~~assets ~~periodically~~are ~~reviews~~held by the ~~investments~~Company’s inwholly-owned ~~marketable~~captive ~~securities~~insurance ~~and~~company ~~restricted~~subsidiary ~~marketable~~as ~~securities~~required ~~for~~by ~~credit~~state ~~impairment~~insurance ~~when~~regulations. anThe ~~investment~~Company’s ~~fair~~investment ~~value~~policy ~~declines~~is ~~below~~intended ~~the~~to ~~amortized~~manage ~~cost~~the ~~basis~~assets ~~and~~to ~~whenever~~achieve ~~events~~the orgoals ~~changes~~of inpreserving ~~circumstances~~principal, ~~indicate~~maintaining ~~that~~adequate ~~the~~liquidity ~~carrying~~at ~~amount~~all oftimes anand ~~asset~~maximizing ~~may~~returns ~~not~~subject beto ~~recoverable~~investment guidelines. AsThe ofinvestment ~~December 31,~~policy ~~2024,~~limits ~~management~~investment ~~believes~~to ~~that~~certain ~~the~~types ~~recorded~~of ~~value~~instruments ofissued ~~the~~by ~~Company’s~~institutions ~~investments~~primarily inwith ~~marketable~~investment ~~securities~~grade ~~and~~credit ~~restricted~~ratings ~~marketable~~and ~~securities~~places ~~was~~restrictions ~~recoverable~~on inconcentration ~~all~~by ~~material~~type ~~respects~~and issuer.

The Company periodically reviews the investments in marketable securities and restricted marketable securities for credit impairment when an investment’s fair value declines below the amortized cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. As of December 31, 2025, management believes that the recorded value of the Company’s investments in marketable securities and restricted marketable securities was recoverable in all material respects.

Accounts and Notes Receivable

Accounts and notes receivable consist of ~~Housekeeping~~Environmental Services and Dietary segment trade receivables from contracts with customers. The Company’s payment terms with customers for services provided are defined within each customer’s service agreement and range from prepaid to 120 days. Accounts receivable are considered short term assets as the Company does not grant payment terms greater than one year. Accounts receivable initially are recorded at the transaction amount and are recorded after the Company has an unconditional right to payment where only the passage of time is required before payment is received. Each reporting period, the Company evaluates the collectability of outstanding receivable balances and records an allowance for doubtful accounts representing an estimate of future expected credit loss. Additions to the allowance for doubtful accounts are made by recording a charge to bad debt expense reported in costs of services provided.

Notes receivable are ~~initially~~typically recorded when accounts receivable are transferred into a promissory note and are recorded as an alternative to accounts receivable to memorialize an unqualified promise to pay a specific sum, typically with interest, in accordance with a defined payment schedule. Notes receivable are recorded at face value less any imputed interest assessed. The Company’s payment terms with customers on promissory notes can vary based on several factors and the circumstances of each promissory note, however most promissory notes mature over 1 to 45 years. Similar to accounts receivable, each reporting period the Company evaluates the collectability of outstanding notes receivable balances and records an allowance for doubtful accounts representing an estimate of future expected credit losses. Additions to the allowance for doubtful accounts are made by recording a charge to bad debt expense reported in costs of services provided.

Allowance for Doubtful Accounts

Management utilizes financial modeling to determine an allowance that reflects its best estimate of the lifetime expected credit losses on accounts and notes receivable which is recorded to offset the receivables. Modeling is prepared after considering historical experience, current conditions and reasonable and supportable economic forecasts to estimate lifetime expected credit losses. Accounts and notes receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded as a reduction of bad debt expense when received.

Inventories and Supplies

Inventories and supplies include housekeeping, linen and laundry supplies, as well as food provisions and supplies. Non-linen inventories and supplies are stated on a first-in, first-out (FIFO) basis, and reduced as deemed necessary to approximate the lower of cost or net realizable value. Linen supplies are amortized on a straight-line basis over their estimated useful life of 24 months.

Revenue Recognition

The Company recognizes revenue from contracts with customers when or as the promised goods and services are provided to customers. Revenues are reported net of sales taxes that are collected from customers and remitted to taxing authorities. The amount of revenue recognized by the Company is based on the expected value of consideration to which the Company is entitled in exchange for providing the contracted goods and services and when it is probable that the Company will collect substantially all of such consideration. Refer to Note 23 — Revenue herein for more information regarding the Company’s revenue recognition policy.

Leases

The Company records assets and liabilities on the Consolidated Balance Sheets to recognize the rights and obligations arising from leasing arrangements with contractual terms greater than 12 months. A leasing arrangement includes any contract which entitles the Company to the right of use of an identified tangible asset where there are no restrictions as to the direct of use of the asset, and the Company obtains substantially all of the economic benefits from the right of use.

Table of Contents

Leases

Property and Equipment, Net

Property and equipment, with the exception of those pertaining to leases, are stated at cost, net of accumulated depreciation. Additions, renewals and improvements are capitalized, while maintenance and repair costs are expensed when incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in Investment and other income ~~(loss)~~, net on the Consolidated Statements of Comprehensive Income. Depreciation is recorded using the straight-line method over the following estimated useful lives: ~~Housekeeping~~Environmental Services and Dietary equipment — 3 to 5 years; computer hardware and software — 5 years; and other, consisting of furniture and fixtures, leasehold improvements and vehicles — 5 to 10 years. Depreciation expense on property and equipment, inclusive of amortization of lease right-of-use assets, for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023 was $1113.90 million, $1011.59 million and $10.5 million, respectively.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under this method, income tax expense or benefits are recognized for the amount of taxes payable or refundable for the current period. The Company accrues for probable tax obligations as required based on facts and circumstances in various regulatory environments. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities. When appropriate, valuation allowances are recorded to reduce deferred tax assets to amounts for which realization is more likely than not.

Uncertain income tax positions taken or expected to be taken in tax returns are reflected within the Company’s consolidated financial statements based on a recognition and measurement process.

The Company may from time to time be assessed interest or penalties by taxing jurisdictions, although any such assessments historically have been minimal and immaterial to its financial results. When the Company has received an assessment for interest and/or penalties, it will be classified in the financial statements as selling, general and administrative ~~expense~~expenses. In addition, any interest or penalties relating to recognized uncertain tax positions would also be recorded in selling, general and administrative ~~expense~~expenses.

Earnings per Common Share

Basic earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is computed using the weighted-average number of common shares outstanding and dilutive common shares, such as those issuable upon exercise of stock options and upon the vesting of restricted stock units (“RSUs”), deferred stock units (“DSUs”), and performance-based restricted stock units (“PSUs”).

Share-Based Compensation

The Company estimates the fair value of share-based awards on the date of grant using the Black-Scholes valuation model for stock options, using a Monte Carlo simulation for PSUs and using the share price on the date of grant for RSUs and DSUs. The value of the award is recognized ratably as an expense in the Company’s Consolidated Statements of Comprehensive Income over the requisite service periods, with adjustments made for forfeitures as they occur.

Advertising Costs

Advertising costs are expensed when incurred. Advertising costs were not material for the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023.

Impairment of Long-Lived Assets

The carrying amounts of long-lived assets are periodically reviewed to determine whether current events or circumstances warrant adjustment to such carrying amounts. Any impairment would be measured as the amount that the carrying value of such assets exceeds their fair value. Considerable management judgment is necessary to estimate the fair value of assets. Assets to be disposed of are carried at the lower of their financial statement carrying amount or fair value, less cost to sell. No impairment loss was recognized on the Company’s long-lived assets during the years ended December 31, 2024, 2023 or 2022.

Table of Contents

Impairment of Long-Lived Assets

Goodwill and Other Intangible Assets

Goodwill represents the excess of cost over the fair value of net assets of acquired businesses. Management reviews the carrying value of goodwill annually during the fourth quarter to assess for impairment or more often if events or circumstances indicate that the carrying value may exceed its estimated fair value. Other intangible assets are amortized on a straight-line basis over their respective useful lives.

No impairment loss was recognized on the Company’s intangible assets or goodwill during the years ended December 31, ~~2024~~2025, ~~2023~~2024 or ~~2022~~2023.

Treasury Stock

Treasury stock purchases are accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Gains or losses on the subsequent reissuance of shares are credited or charged to additional paid-in capital.

~~Authorized~~Accrued ~~Shares~~Insurance ~~of Common Stock~~Claims

OnThe ~~June~~Company 18self-insures losses related to general liability, ~~2024~~workers’ compensation and other claims up until predetermined loss limits and purchases excess insurance for amounts above these loss limits. With the assistance of third-party actuaries, the Company ~~amended~~calculates ~~its~~an ~~Restated~~expected ~~Articles~~loss ofrate ~~Incorporation~~for toclaims ~~increase~~retained under the ~~number~~self-insurance ofprogram ~~authorized~~and ~~shares~~calculates ofloss ~~common~~reserve ~~stock~~estimates ~~available~~ for ~~issuance~~previously ~~from~~incurred ~~100 million~~liabilities toon ~~200 million,~~a asquarterly ~~approved~~basis. byThe ~~the~~Company ~~requisite~~employs ~~vote~~loss ofdevelopment assumptions based on claims history, developments in the Company’s ~~shareholders~~industry, regulatory, and other trends, periodic claims development, and incurred-but-not-reported losses using loss development factors based upon historical experience. The actual cost to settle accrued insurance claims may differ from reserve estimates due to changes in the factors mentioned above. Adjustments to previously incurred reserve estimates are recorded in income in the period which the estimate was revised.

Investments in Equity Securities

The Company accounts for investments in equity securities using the equity method when the Company determines that it can exercise significant influence over the investee. The Company accounts for investments in equity securities at fair value when the Company determines that it cannot exercise significant influence over the investee. During the year ended December 31, 2024, the Company invested $2.8 million for a 25% ownership share in a health care technology company which specializes in the long-term and acute care markets which was accounted for as an equity method investment. Investments in equity securities are recorded within “Other long-term assets” in the Company’s Consolidated Balance Sheets. The Company’s proportionate share of earnings or losses of the investee are recorded within “Investment and other income, net” on the Company’s Consolidated Statements of Comprehensive Income. The Company elects to record its proportionate share of earnings or losses in equity method investments using a three- month lag based on the most recently available financial statements.

Concentrations of Credit Risk

The Company’s financial instruments that are subject to credit risk are cash and cash equivalents, restricted cash equivalents, marketable securities, restricted marketable securities, deferred compensation funding and accounts and notes receivable. At December 31, ~~2024~~2025 and ~~2023~~2024, the majority of the Company’s cash and cash equivalents, restricted cash equivalents, marketable securities and restricted marketable securities were held in two large financial ~~institution~~institutions located in the United States. The Company’s marketable securities and restricted marketable securities are fixed income investments which are highly liquid and can be readily purchased or sold through established markets. The Company’s deferred compensation funding consists of fund and money market investments all of which are highly liquid and held in a trust account.

The Company’s customers are concentrated in the healthcare industry and are primarily providers of long-term care. The revenues of many of the Company’s customers are highly reliant on Medicare, Medicaid and third party payors’ reimbursement funding rates. New legislation or changes in existing regulations could directly impact the governmental reimbursement programs in which the Company’s customers participate. As a result, the Company may not realize the full effects such programs may have on the Company’s customers until such new legislation or changes in existing regulations are fully implemented and governmental agencies issue applicable regulations or guidance.

Although the Company negotiates the pricing and other terms for the majority of our purchases of food and dining supplies directly with national manufacturers, the Company procures more than 50% of these products and other items through Sysco Corporation (“Sysco”). Sysco is responsible for tracking the Company’s orders and delivering products to the Company’s customer locations.

Table of Contents

The Company’s customers are primarily in the healthcare industry and are primarily providers of long-term care. The revenues of many of the Company’s customers are highly reliant on Medicare, Medicaid and third party payors’ reimbursement funding rates. New legislation or changes in existing regulations could directly impact the governmental reimbursement programs in which the Company’s customers participate. As a result, the Company may not realize the full effects such programs may have on the Company’s customers until such new legislation or changes in existing regulations are fully implemented and governmental agencies issue applicable regulations or guidance.

Significant Customer

For the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, Genesis Healthcare, Inc. (“Genesis”) accounted for $~~148~~133.95 million or 8.7.3%, $~~181~~148.49 million or 108.97% and $~~169~~181.14 million or 10.09% of the Company’s consolidated revenues, respectively. AsSee ofNote ~~December 31,~~5 ~~2024,~~— ~~the~~Allowance ~~Company~~for ~~had~~Doubtful ~~outstanding~~Accounts ~~accounts~~for ~~receivable~~discussion ~~and notes receivable~~ of ~~$46.1 million and $21.9 million, respectively, from~~ Genesis.’s ~~Although~~outstanding ~~the~~accounts ~~Company~~and ~~expects~~notes toreceivable ~~continue~~balances ~~its~~and ~~relationship~~related ~~with Genesis, there can be no assurance thereof~~allowances. Revenues generated from Genesis were included in both operating segments previously mentioned. Any extended discontinuance of revenues, or significant reduction, from this customer could, if not replaced, have a material impact on our operations. In addition, if Genesis fails to abide by current payment terms it could ~~increase our accounts receivable balance and~~ have a material adverse effect on our financial condition, results of operations, and cash flows. No ~~other~~ single customer or customer group represented more than 10% of consolidated revenues for the years ended December 31, 2025 and 2024, ~~2023~~ and ~~2022~~no other single customer or customer group represented more than 10% of consolidated revenues for the year ended December 31, 2023.

~~Reclassification~~Government Grants

~~Prior~~The ~~period~~Company ~~line~~accounts ~~items~~for ingovernment ~~the~~grants ~~Consolidated~~by ~~Balance~~analogy ~~Sheets~~to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance and recognizes income when there is reasonable assurance that the ~~Consolidated~~receipt ~~Statements~~of credits and compliance with the terms of ~~Stockholders’~~the ~~Equity~~government ~~have~~grants ~~been~~are ~~revised~~obtained. toSee ~~conform~~Note 2 ~~with~~— ~~current~~Employee ~~period~~Retention ~~presentation~~Credit for additional detail on government grants recognized in income during the year ended December 31, 2025.

Recent Accounting Pronouncements

In ~~November~~December 2023, the FASB issued ~~Accounting Standards Update (“~~ASU”) 2023-0709, ~~Segment~~Income ~~Reporting~~Taxes (Topic ~~280~~740): Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures, which ~~updates~~enhances ~~reportable~~effective ~~segment~~tax rate reconciliation disclosure requirements ~~primarily~~and ~~through~~provides ~~enhanced~~clarity to the disclosures ~~about~~of ~~significant~~income ~~segment~~taxes ~~expenses~~paid, income before taxes and provision for income taxes. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company adopted ASU 2023-0709 for the ~~annual~~year ~~period~~ ended December 31, ~~2024~~2025 and applied the standard retrospectively. Refer to Note 12 — ~~Segment~~Income ~~Information~~Taxes herein for further information.

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, Income ~~Taxes~~Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (~~Topic~~Subtopic ~~740~~220-40): ~~Improvements~~Disaggregation toof Income ~~Tax~~Statement ~~Disclosures~~Expenses, which ~~enhances~~amends ~~effective~~the ~~tax~~codification ~~rate~~to ~~reconciliation~~enhance ~~disclosure~~disclosures ~~requirements~~about a public business entity’s expenses and ~~provides~~address ~~clarity~~requests tofrom investors for more detailed information about the ~~disclosures~~types of ~~income~~expenses ~~taxes~~(including ~~paid~~purchases of inventory, ~~income~~employee ~~before~~compensation, ~~taxes~~depreciation, amortization, and ~~provision~~depletion) ~~for~~in ~~income~~commonly ~~taxes~~presented expense captions. The amendments are effective for fiscal years beginning after December 15, ~~2024~~2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which amends the codification to enhance disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions. The amendments are effective for fiscal years beginning after December 15, 2026. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

Employee Retention Credit

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). One provision within the CARES Act provided an Employee Retention Credit (“ERC”), which allows for employers to claim a refundable tax credit against the employer share of Social Security tax equal to 50% of the qualified wages paid to employees from March 13, 2020 through December 31, 2020. The ERC was subsequently expanded in 2021 for employers to claim a refundable tax credit for 70% of the qualified wages paid to employees from January 1, 2021 through September 30, 2021.

Table of Contents

~~The~~In ~~Company~~July ~~accounted~~2025, ~~for~~ the ~~ERC~~FASB byissued ~~analogy~~ASU to2025-05, ~~International~~Financial ~~Accounting~~Instruments—Credit ~~Standard~~Losses (~~“IAS”~~Topic 326): ~~20,~~Measurement ~~Accounting~~of Credit Losses for ~~Government~~Accounts ~~Grants~~Receivable and ~~Disclosure~~Contract ofAssets, ~~Government~~which ~~Assistance.~~amends ~~During~~ the ~~quarter~~codification ~~ended~~to, ~~June~~among ~~30,~~other ~~2023~~changes, ~~the~~provide ~~Company filed~~ a ~~claim~~practical ~~for~~expedient ~~the~~allowing ~~ERC~~public ~~for~~entities ~~qualified~~to ~~wages~~assume ~~paid~~that inconditions ~~2020~~as ~~and~~of ~~2021. Through February 14, 2025,~~ the ~~Company~~balance ~~has~~sheet ~~been~~date ~~informed~~impacting ~~only that~~ the ~~IRS~~creditworthiness ~~review~~ of ~~the~~receivables ~~ERC has been delayed,~~ and nocontract ~~refunds~~assets orwill ~~other~~remain ~~material~~unchanged ~~updates~~over ~~from~~their ~~the~~remaining ~~IRS~~lives ~~regarding~~when ~~the~~estimating ~~ERC~~expected ~~filing~~credit ~~have been received~~losses. The ~~Company~~amendment ~~believes that there~~ is ~~not~~effective ~~reasonable~~for ~~assurance~~fiscal ~~that~~years ~~any~~beginning ~~receipt~~after ofDecember ~~credits~~15, ~~and~~2025, ~~compliance~~including ~~with~~interim ~~the~~periods ~~terms~~within ofthose ~~the~~fiscal ~~ERC~~years. ~~will~~Early beadoption ~~obtained~~is ~~and~~permitted. ~~therefore~~The ~~has~~amendments ~~not~~in ~~recognized~~this ~~any~~update ~~amounts~~should ~~related~~be toapplied ~~the~~on ~~ERC~~a inprospective ~~the~~basis. ~~accompanying~~The ~~consolidated~~Company ~~financial~~elected ~~statements.~~to ~~Should~~early ~~reasonable~~adopt ~~assurance~~ASU ~~over~~2025-05 ~~receipt~~as of ~~and~~September ~~compliance~~30, ~~with~~2025 ~~terms~~and ofapply the ~~ERC~~practical beexpedient ~~obtained~~to inits ~~future~~accounts ~~periods,~~and ~~the~~notes ~~Company~~receivables ~~would~~and ~~recognize~~contract ~~such~~assets ~~amounts~~arising asfrom antransactions ~~offset to expense~~ within ~~“Costs of services provided” in~~ the ~~Consolidated~~scope ~~Statements~~ of ~~Comprehensive~~ASC ~~Income~~606. InAdoption ~~the~~of ~~event~~this ~~the~~ASU ~~Company~~did ~~obtains~~not have a ~~refund~~material inimpact ~~future~~on ~~periods, such refunds would be subject to IRS audit under~~ the ~~applicable~~Company’s ~~statute~~consolidated offinancial ~~limitations~~statements.

~~Note~~In 2September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill ~~Revenue~~and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which amends and improves the existing rules for accounting for internal-use software, including clarifying when capitalization of software development costs should begin, providing more operable criteria that better align with modern development practices (such as agile and iterative methods), and reducing diversity in practice for cloud computing arrangements. The amendments in this update are effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. Early adoption is permitted, with prospective application required. The Company is currently evaluating the impact of this ASU on the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance for accounting for government grants received by business entities. The ~~Company~~amendments ~~presents~~require ~~its~~that ~~consolidated~~a ~~revenues~~government ~~disaggregated~~grant received by ~~reportable~~a ~~segment~~business asentity ~~Management~~should ~~evaluates~~not be recognized until (1) it is probable that (a) a business entity will comply with the ~~nature,~~conditions ~~amount,~~attached ~~timing~~to the grant and ~~uncertainty~~(b) ofthe grant will be received and (2) a business entity meets the ~~Company’s~~recognition ~~revenues~~guidance byfor ~~segment.~~a ~~Refer~~grant related to ~~Note~~an 12asset —or ~~Segment~~a ~~Information~~grant ~~herein~~related asto ~~well~~income. asThe amendments in this update are effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years. Early adoption is permitted. There are three allowable transition approaches in the ~~information~~standard, ~~below~~including ~~regarding~~a modified prospective approach, a modified retrospective approach, and a retrospective approach all defined in the standard. The Company’s ~~reportable~~is ~~segments.~~currently evaluating the impact of this ASU on the consolidated financial statements.

~~Housekeeping~~Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.

Housekeeping accounted for $765.4 million, $766.7 million and $795.7 million of the Company’s consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively. Housekeeping services consist of managing customers’ housekeeping departments, which are principally responsible for the cleaning, disinfecting and sanitizing of resident rooms and common areas of the customers’ facilities, as well as the laundering and processing of the bed linens, uniforms, resident personal clothing and other assorted linen items utilized at the customers’ facilities. Upon beginning service with a customer facility, the Company will typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise and train the front-line personnel and coordinate housekeeping services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.Reclassification

~~Dietary~~Prior period line items in the Consolidated Balance Sheets have been revised to conform with current period presentation.

~~Dietary~~Note ~~services~~2—Employee ~~accounted~~Retention for $950.3 million, $904.7 million and $894.5 million of the Company’s consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively. Dietary services consist of managing customers’ dietary departments which are principally responsible for food purchasing, meal preparation and professional dietitian services, which include the development of menus that meet the dietary needs of residents. On-site management is responsible for all daily dietary department activities, with regular support provided by a District Manager specializing in dietary services. The Company also offers clinical consulting services to facilities which if contracted is a service bundled within the monthly service provided to customers. Upon beginning service with a customer facility, the Company will typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise and train the front-line personnel and coordinate dietitian services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.Credit

On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act provided the Employee Retention Tax Credit (“ERC”), which allows employers to claim a refundable tax credit against the employer share of Social Security tax equal to 50% of the qualified wages paid to employees from March 13, 2020 through December 31, 2020. The ERC was subsequently expanded in 2021 for employers to claim a refundable tax credit for 70% of the qualified wages paid to employees from January 1, 2021 through September 30, 2021. Refunds received by the Company and refunds obtained in any future periods are subject to IRS audit under the applicable statutes of limitations.

On July 4, 2025, the U.S. Government enacted the One Big Beautiful Bill Act (“OBBBA”), which included provisions impacting the ERC including imposing an extended statute of limitations for the IRS to audit ERC filings for the quarter ended September 30, 2021. The OBBBA did not include any provisions extending the statute of limitations for auditing ERC filings for quarters ending March 31, 2020 through June 30, 2021. Following the passing of the OBBBA, the Company determined that the statute of limitations had expired for filings for quarters ending June 30, 2020 through June 30, 2021 and that the Company obtained reasonable assurance over receipt of, and compliance with, the terms of the ERC for refunds received from the IRS for those periods.

Table of Contents

~~Revenue~~During ~~Recognition~~the year ended December 31, 2025, the Company received $51.8 million in ERC refunds from the IRS, including interest income of $7.0 million. During the year ended December 31, 2025, the Company recognized $34.2 million of ERC refunds as a reduction to Costs of services provided, $5.3 million of interest income on such refunds received within Investment and other income, net, and $2.1 million of professional fees expense associated with the ERC refunds within Selling, general and administrative expenses in the Consolidated Statements of Comprehensive Income. At December 31, 2025, the Company recorded a deferred ERC credit liability of $12.3 million within Other accrued expenses and current liabilities on the Consolidated Balance Sheets related to ERC refunds received for amended returns filed for the quarter ended September 30, 2021. The Company will recognize income on the deferred liability and future ERC refunds received once the Company determines reasonable assurance that compliance with the terms of the ERC has been obtained.

~~The~~Note ~~Company’s~~3 ~~revenues~~— are derived from contracts with customers. The Company recognizes revenue to depict the transfer of promised goods and services to customers in amounts that reflect the consideration to which the Company is entitled in exchange for those goods and services. The Company’s costs of obtaining contracts are not material.Revenue

The Company ~~performs~~presents ~~services and provides goods in accordance with~~ its ~~contracts~~consolidated ~~with~~revenues ~~its~~disaggregated ~~customers. Such contracts typically provide for a renewable service term, cancellable~~ by ~~either~~reportable ~~party~~segment upon 30 to 90 days’ notice, after an initial period of 60 to 120 days. A performance obligation is the unit of account under ASC 606 - Revenues from Contracts with Customers (“ASC 606”) and is defined as amanagement ~~promise~~evaluates ~~in a contract to transfer a distinct good or service to~~ the ~~customer. The Company’s Housekeeping and Dietary contracts relate to the provision of bundles of goods~~nature, ~~services or both~~amount, ~~which~~timing ~~represent a series of distinct goods~~ and ~~services~~uncertainty ~~that are substantially the same and that have the same pattern~~ of ~~transfer to~~ the ~~customer. The~~ Company’s ~~accounts~~revenues ~~for~~by ~~the series as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided~~segment. ~~Revenue~~Refer ~~is recognized using the output method, which is based upon the delivery of goods and services~~ to ~~the~~Note ~~customers’~~13 ~~facilities.~~— InSegment ~~limited~~Information ~~cases,~~herein ~~the~~as ~~Company~~well ~~provides~~as ~~goods, services or both before~~ the ~~execution~~information ofbelow aregarding ~~written contract. In these cases,~~ the Company’s ~~defers~~reportable ~~the recognition of revenue until a contract is executed~~segments. The amount of such deferred revenue was $0.2 million, less than $0.1 million and $0.3 million as of December 31, 2024, 2023 and 2022, respectively. Additionally, all such revenue amounts deferred as of December 31, 2023 were subsequently recognized as revenue during the year ended December 31, 2024.

~~The~~Environmental transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services to its customers. The transaction price does not include taxes assessed or collected. The Company’s contracts detail the fees that the Company charges for the goods and services it provides. For certain contracts which contain a variable component to the transaction price, the Company is required to make estimates of the amount of consideration to which the Company will be entitled, based on variability in resident and patient populations serviced, product usage, quantities consumed or history of implicit price concessions. The Company recognizes revenue related to such estimates when the Company determines that it is probable there will not be a significant reversal in the amount of revenue recognized. In instances where variable consideration exists and management’s estimate of variable consideration changes in subsequent periods, resulting in a change in transaction price, the Company records an adjustment to revenue on a cumulative catch-up basis. The Company’s contracts generally do not contain significant financing components, as payment terms are less than one year. In the event that the Company provides ongoing services to customers in active bankruptcy proceedings, in receivership or in other similar legal positions, the Company defers the recognition of revenue until cash is received, as the Company determines that collectability of substantially all of the entitled consideration in exchange for services provided is not probable for such customers until cash is received. Services

~~During~~Environmental Services accounted for $824.7 million, $765.4 million and $766.7 million of the ~~year~~Company’s consolidated revenues for the years ended December 31, ~~2023~~2025, ~~the~~2024 ~~Company~~and ~~recorded~~2023, arespectively. ~~reduction~~Environmental toServices ~~revenues~~consist of ~~$13.8 million~~managing tocustomers’ ~~reflect~~housekeeping ~~the~~departments, ~~Company’s~~which ~~change~~are inprincipally ~~estimate~~responsible for ~~price~~the ~~concessions~~cleaning, ~~based~~disinfecting onand ~~new~~sanitizing ~~facts~~of resident rooms and ~~circumstances~~common ~~related~~areas toof athe ~~client~~customers’s ~~out-~~facilities, as well as the laundering and processing of~~-court~~ ~~restructuring.~~the ~~Such~~bed ~~adjustment~~linens, ~~reflects~~uniforms, resident personal clothing and other assorted linen items utilized at the ~~Company~~customers’s ~~current~~facilities. ~~anticipated~~Upon ~~concession~~beginning toservice bewith ~~granted~~a oncustomer ~~certain~~facility, ~~amounts~~the ~~due~~Company aswill typically hire and train the ~~Company’s~~employees ~~current~~previously ~~operating~~employed ~~plans~~by ~~are~~such facility and assign an on-site manager to ~~maintain~~supervise ~~providing~~and train the front-line personnel and coordinate housekeeping services ~~under~~with ~~this~~other ~~arrangement~~facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.

~~The Company allocates the transaction price to each performance obligation noting that the bundle of goods, services or goods and services provided under each Housekeeping and~~ Dietary contract represents a single performance obligation that is satisfied over time. The Company recognizes the related revenue when it satisfies the performance obligation by transferring a bundle of promised goods, services or both to a customer. Such recognition is on a monthly or weekly basis, as goods are provided and services are performed. In some cases, the Company requires customers to pay in advance for goods and services to be provided. As of December 31, 2024, 2023 and 2022, the value of the contract liabilities associated with customer prepayments was $4.0 million, $3.2 million and $3.1 million, respectively. The Company recognized $1.9 million of revenue during the year ended December 31, 2024 which was recorded as a contract liability on December 31, 2023. The Company recognized $1.8 million of revenue during the year ended December 31, 2023 which was recorded as a contract liability on December 31, 2022.

Dietary services accounted for $1,012.5 million, $950.3 million and $904.7 million of the Company’s consolidated revenues for the years ended December 31, 2025, 2024 and 2023, respectively. Dietary services consist of managing customers’ dietary departments which are principally responsible for food purchasing, meal preparation and professional dietitian services, which include the development of menus that meet the dietary needs of residents. On-site management is responsible for all daily dietary department activities, with regular support provided by a District Manager specializing in dietary services. The Company also offers clinical consulting services to facilities which if contracted is a service bundled within the monthly service provided to customers. Upon beginning service with a customer facility, the Company will typically hire and train the employees previously employed by such facility and assign an on-site manager to supervise and train the front-line personnel and coordinate dietitian services with other facility support functions in accordance with customer requests. Such management personnel also oversee the execution of various cost and quality control procedures including continuous training and employee evaluation.

Table of Contents

Revenue Recognition

The Company’s revenues are derived from contracts with customers. The Company recognizes revenue to depict the transfer of promised goods and services to customers in amounts that reflect the consideration to which the Company is entitled in exchange for those goods and services. The Company’s costs of obtaining contracts are not material.

The Company performs services and provides goods in accordance with its contracts with its customers. Such contracts typically provide for a renewable service term, cancellable by either party upon 30 to 90 days’ notice, after an initial period of 60 to 120 days. A performance obligation is the unit of account under ASC 606 - Revenues from Contracts with Customers (“ASC 606”) and is defined as a promise in a contract to transfer a distinct good or service to the customer. The Company’s Environmental Services and Dietary contracts relate to the provision of bundles of goods, services or both, which represent a series of distinct goods and services that are substantially the same and that have the same pattern of transfer to the customer. The Company accounts for the series as a single performance obligation satisfied over time, as the customer simultaneously receives and consumes the benefits of the goods and services provided. Revenue is recognized using the output method, which is based upon the delivery of services to and provision of services at the customers’ facilities. In limited cases, the Company provides goods, services or both before the execution of a contract. In these cases, the Company defers the recognition of revenue until a contract is executed. The amount of such deferred revenue was $0.1 million, $0.2 million and $0.1 million as of December 31, 2025, 2024 and 2023, respectively. Additionally, all such revenue amounts deferred as of December 31, 2024 were subsequently recognized as revenue during the year ended December 31, 2025.

The transaction price is the amount of consideration to which the Company is entitled in exchange for transferring promised goods or services to its customers. The transaction price does not include taxes assessed or collected. The Company’s contracts detail the fees that the Company charges for the goods and services it provides. For certain contracts which contain a variable component to the transaction price, the Company is required to make estimates of the amount of consideration to which the Company will be entitled, based on variability in resident and patient populations serviced, product usage, quantities consumed or history of implicit price concessions. The Company recognizes revenue related to such estimates when the Company determines that it is probable there will not be a significant reversal in the amount of revenue recognized. In instances where variable consideration exists and management’s estimate of variable consideration changes in subsequent periods, resulting in a change in transaction price, the Company records an adjustment to revenue on a cumulative catch-up basis. The Company’s contracts generally do not contain significant financing components, as payment terms are less than one year.

In the event that the Company provides ongoing services to customers in active bankruptcy proceedings, in receivership or in other similar legal positions, the Company defers the recognition of revenue until cash is received, as the Company determines that collectability of substantially all of the entitled consideration in exchange for services provided is not probable for such customers until cash is received. In addition, for a subset of customers with heightened collectability risk or specific contractual terms, the Company recognizes revenue on a cash basis—i.e., when payment is received. The Company evaluates the probability of collection at contract inception and reassesses as facts and circumstances change.

The Company allocates the transaction price to each performance obligation noting that the bundle of goods, services or goods and services provided under each Environmental Services and Dietary contract represents a single performance obligation that is satisfied over time. The Company recognizes the related revenue when it satisfies the performance obligation by transferring a bundle of promised goods, services or both to a customer. Such recognition is on a monthly or weekly basis, as goods are provided and services are performed. In some cases, the Company requires customers to pay in advance for goods and services to be provided. As of December 31, 2025, 2024 and 2023, the value of the contract liabilities associated with customer prepayments was $3.9 million, $4.0 million and $3.2 million, respectively. The Company recognized $2.4 million of revenue during the year ended December 31, 2025 which was recorded as a contract liability on December 31, 2024. The Company recognized $1.9 million of revenue during the year ended December 31, 2024 which was recorded as a contract liability on December 31, 2023.

Transaction Price Allocated to Remaining Performance Obligations

The Company recognizes revenue as it satisfies the performance obligations associated with contracts with customers, which due to the nature of the goods and services provided by the Company, are satisfied over time. Contracts may contain transaction prices that are fixed, variable or both. The Company’s contracts with customers typically provide for an initial term with renewable service terms, cancellable by either party upon 30 to 90 days’ notice after an initial period of 60 to 120 days. The Company has elected to apply the practical expedient that permits exclusion of information about the remaining performance obligations with original expected durations of one year or less. There were no remaining performance obligations with original expected durations of one year or longer as of December 31, ~~2024~~2025.

Note 3 — Accounts and Notes Receivable

The Company’s accounts and notes receivable balances consisted of the following as of December 31, 2024, 2023 and 2022:

	December 31, 2024		December 31, 2023		December 31, 2022
	(in thousands)
Short-term
Accounts receivable	$	418,427	$	425,681	$	375,225
Allowance for doubtful accounts, accounts receivable	(87,520)		(80,817)		(66,601)
Total net accounts receivable	$	330,907	$	344,864	$	308,624
Notes receivable — short–term portion	61,801		45,078		31,744
Allowance for doubtful accounts, notes receivable — short–term portion	(10,372)		(6,433)		(3,591)
Total net notes receivable — short–term portion	$	51,429	$	38,645	$	28,153
Long-term
Notes receivable	$	43,944	$	29,281	$	35,882
Allowance for doubtful accounts	(2,890)		(4,449)		(3,273)
Total net long-term notes receivable	$	41,054	$	24,832	$	32,609
Total net accounts and notes receivable	$	423,390	$	408,341	$	369,386

The Company makes credit decisions on a case-by-case basis after reviewing a number of qualitative and quantitative factors related to the specific customer as well as current industry variables that may impact that customer. There are a variety of factors that impact a customer’s ability to pay in accordance with the Company’s contracts. These factors include, but are not limited to, fluctuating census numbers, litigation costs and the customer’s participation in programs funded by federal and state governmental agencies. Deviations in the timing or amounts of reimbursements under those programs can impact the customer’s cash flows and its ability to make timely payments. However, the customer’s obligation to pay the Company in accordance with the contract is not contingent upon the customer’s cash flow. Notwithstanding the Company’s efforts to minimize its credit risk exposure, the aforementioned factors, as well as other factors that impact customer cash flows or ability to make timely payments, could have an indirect, yet material, adverse effect on the Company’s results of operations and financial condition.

Fluctuations in net accounts and notes receivable are generally attributable to a variety of factors including, but not limited to, the timing of cash receipts from customers and the inception, transition, modification or termination of customer relationships. The Company deploys significant resources and invests in tools and processes to optimize Management’s credit and collections efforts. When appropriate, the Company utilizes interest-bearing promissory notes to enhance the collectability of amounts due, by instituting definitive repayment plans and providing a means by which to further evidence the amounts owed. In addition, the Company may amend contracts from full service to management-only arrangements, or adjust contractual payment terms, to accommodate customers who have in good faith established clearly-defined plans for addressing cash flow issues. These efforts are intended to minimize the Company’s collections risk.

At December 31, 2024, the face value and discounted value of notes receivable with imputed interest were $39.7 million and $35.9 million, respectively. At December 31, 2023, the face value and discounted value of notes receivable with imputed interest were $7.6 million and $6.6 million, respectively. The effective interest rates applied on notes with imputed interest at December 31, 2024 and 2023 were 6.9% and 8.0%, respectively.

Table of Contents

Note 4 — ~~Allowance~~Accounts ~~for~~and ~~Doubtful~~Notes ~~Accounts~~Receivable

InThe ~~making the~~ Company’s makes credit ~~evaluations,~~decisions ~~management~~on ~~considers~~a ~~the~~case-by-case ~~general~~basis ~~collection~~after ~~risk~~reviewing ~~associated~~a ~~with~~number ~~trends~~of inqualitative ~~the~~and ~~long-term~~quantitative ~~care~~factors ~~industry.~~related ~~The~~to ~~Company~~the ~~establishes~~specific ~~credit~~customer ~~limits~~as ~~through~~well ~~payment~~as ~~terms~~current ~~with~~industry ~~customers,~~variables ~~performs~~that ~~ongoing~~may ~~credit~~impact ~~evaluations~~that ~~and~~customer. ~~monitors~~There ~~accounts~~are ona anvariety ~~aging~~of ~~schedule~~factors ~~basis~~that toimpact ~~minimize~~a ~~the~~customer’s ~~risk~~ability ofto ~~loss.~~pay ~~Despite~~in accordance with the Company’s ~~efforts~~contracts. toThese ~~minimize~~factors ~~credit~~include, ~~risk~~but ~~exposure~~are not limited to, ~~customers~~fluctuating ~~could~~census benumbers, ~~adversely~~litigation ~~affected~~costs ifand ~~future~~the ~~industry~~customer’s ~~trends~~participation ~~change~~in programs funded by federal and state governmental agencies. Deviations in ~~such~~the atiming ~~manner~~or asamounts toof ~~negatively~~reimbursements under those programs can impact ~~their~~the customer’s cash flows. Asand aits ~~result~~ability to make timely payments. However, the ~~Company~~customer’s ~~future~~obligation ~~collection~~to ~~experience~~pay ~~could~~the ~~differ~~Company ~~significantly~~in ~~from~~accordance ~~historical~~with ~~collection~~the ~~trends~~contract is not contingent upon the customer’s cash flow. IfNotwithstanding the Company’s ~~customers~~efforts ~~experience~~to aminimize ~~negative~~its ~~impact~~credit onrisk ~~their~~exposure, the aforementioned factors, as well as other factors that impact customer cash flows, itor ability to make timely payments, could have aan indirect, yet material, adverse effect on the Company’s results of operations and financial condition.

~~The~~Fluctuations ~~Company~~in ~~evaluates~~net ~~its~~ accounts and notes receivable ~~for~~are ~~expected~~generally ~~credit~~attributable ~~losses~~to ~~quarterly.~~a ~~Accounts~~variety ~~receivable~~of ~~are~~factors ~~evaluated~~including, ~~based~~but onnot ~~internally~~limited ~~developed~~to, ~~credit quality indicators derived from~~ the ~~aging~~timing of ~~receivables.~~cash ~~Notes~~receipts ~~receivable~~from ~~are~~customers ~~evaluated~~and ~~based~~the oninception, ~~internally~~transition, ~~developed~~modification ~~credit~~or ~~quality~~termination ~~indicators derived from management’s assessment~~ of ~~collection~~customer ~~risk~~relationships. AtThe ~~the~~Company ~~end~~deploys ofsignificant ~~each~~resources ~~period,~~and ~~the~~invests ~~Company~~in ~~sets~~tools aand ~~reserve~~processes ~~for~~to ~~expected~~optimize Management’s credit ~~losses on standard accounts~~ and ~~notes~~collections ~~receivable~~efforts. ~~based~~When onappropriate, the Company’s ~~historical~~utilizes ~~loss~~interest-bearing ~~rates.~~promissory ~~Accounts and~~ notes ~~receivable~~to ~~with~~enhance anthe ~~elevated~~collectability ~~risk~~of ~~profile~~amounts due, ~~which~~by ~~are~~instituting ~~from~~definitive ~~customers~~repayment ~~who~~plans ~~have~~and ~~filed~~providing ~~bankruptcy~~a ormeans ~~are~~by ~~subject~~which to ~~collections~~further ~~activity,~~evidence ~~are aggregated and evaluated to determine~~ the ~~total~~amounts ~~reserve for the class of receivable~~owed. ~~Additionally~~In addition, ~~starting in~~ the ~~year~~Company ~~ended~~may ~~December~~amend ~~31,~~contracts ~~2024,~~from ~~for~~full ~~notes~~service ~~receivable~~to management-only ~~evaluates~~arrangements, ~~standard~~or ~~receivables~~adjust ~~based~~contractual onpayment ~~whether~~terms, ~~the~~to ~~customer~~accommodate iscustomers ~~current~~who ~~(paying~~have ~~within~~in 60good ~~days~~faith ofestablished ~~terms)~~clearly-defined orplans ~~delinquent~~for ~~(paying~~addressing ~~outside~~cash offlow ~~60 days of terms)~~issues. AsThese ofefforts ~~December~~are ~~31,~~intended ~~2024,~~to minimize the ~~Genesis~~Company’s ~~note~~collections ~~receivable was classified as delinquent~~risk.

~~ASC~~At ~~326-20~~December 31, -2025, ~~Financial~~the ~~Instruments~~face -value ~~Credit~~and ~~Losses~~discounted ~~(“ASC~~value ~~326-20”)~~of ~~permits~~notes ~~entities~~receivable towith ~~make~~imputed ~~an accounting policy election not to measure an estimate for credit losses on accrued~~ interest ifwere ~~those~~$33.6 ~~entities~~million ~~write~~and ~~off accrued interest deemed uncollectible in a timely manner~~$31.5 ~~The~~million, ~~Company follows an income recognition policy on all interest earned on notes receivable~~respectively. ~~Under~~At ~~such~~December 31, ~~policy~~2024, the ~~Company~~face ~~accounts~~value ~~for all notes receivable on a non-accrual basis~~ and ~~defers~~discounted ~~the~~value ~~recognition~~ of ~~any~~notes ~~interest~~receivable ~~income~~with ~~until~~imputed ~~receipt~~interest ofwere ~~cash payments~~$39.7 ~~This~~million ~~policy~~and ~~was~~$35.9 ~~established~~million, ~~based~~respectively. onThe ~~the~~effective ~~Company’s history of collections of~~ interest onrates ~~outstanding~~applied ~~notes receivable, as we do not deem it probable that we will receive substantially all interest~~ on ~~outstanding~~ notes ~~receivable.~~with ~~Accordingly,~~imputed ~~the Company does not record a credit loss adjustment for accrued~~ interest. ~~For~~at ~~the years ended~~ December 31, ~~2024,~~2025 ~~2023~~ and ~~2022,~~2024 ~~the~~were ~~Company recognized $2~~6.~~8 million, $~~2.8% ~~million~~ and $16.~~1 million in interest income from notes receivable~~9%, respectively.

InNote ~~2024,~~5 ~~LaVie~~— ~~Care~~Allowance ~~Centers, LLC and certain affiliated entities (“LaVie”), several of which are customers of the Company, filed~~ for ~~Chapter~~Doubtful 11 bankruptcy protection in the U.S. Bankruptcy Court for the Northern District of Georgia. The Company increased the allowance for doubtful accounts by $17.6 million related to outstanding LaVie invoices during the year ended December 31, 2024. The Company continues to provide services to LaVie post-petition.Accounts

~~The~~In ~~following~~making ~~tables present~~ the Company’s ~~three~~credit ~~tiers~~evaluations, ofmanagement ~~notes~~considers ~~receivable~~the ~~for~~general collection risk associated with trends in the ~~years~~long-term ~~ended~~care ~~December 31~~industry. The Company establishes credit limits through payment terms with customers, ~~2024~~performs ongoing credit evaluations and ~~2023~~monitors accounts on an aging schedule basis to minimize the risk of loss. Despite the Company’s efforts to minimize credit risk exposure, ~~respectively~~customers could be adversely affected if future industry trends change in such a manner as to negatively impact their cash flows. As a result, ~~further~~the ~~disaggregated~~Company’s byfuture ~~year~~collection experience could differ significantly from historical collection trends. If the Company’s customers experience a negative impact on their cash flows, it could have a material adverse effect on the Company’s results of ~~origination~~operations, asfinancial ~~well~~condition asand ~~write-off~~cash ~~activity:~~flows.

	Notes Receivable as of December 31, 2024
	Amortized Cost Basis by Origination Year
	2024		2023		2022		2021		2020		Prior		Total
	(in thousands)
Notes Receivable
Standard notes receivable	$	53,592	$	7,282	$	15,743	$	—	$	—	$	—	$	76,617
Delinquent notes receivable	$	499	$	1,055	$	1,942	$	671	$	—	$	21,933	$	26,100
Elevated risk notes receivable	$	—	$	1,537	$	—	$	—	$	1,491	$	—	$	3,028
Current-period gross write-offs	$	—	$	742	$	483	$	3,024	$	—	$	26	$	4,275
Current-period recoveries	—		—		—		—		—		—		—
Current-period net write-offs	$	—	$	742	$	483	$	3,024	$	—	$	26	$	4,275

The Company evaluates its accounts and notes receivable for expected credit losses quarterly. Accounts receivable are evaluated based on internally developed credit quality indicators derived from the aging of receivables. Notes receivable are evaluated based on internally developed credit quality indicators derived from management’s assessment of collection risk. At the end of each period, the Company sets a reserve for expected credit losses on standard accounts and notes receivable based on the Company’s historical loss rates. Accounts and notes receivable with an elevated risk profile, which are from customers who have filed bankruptcy or are subject to collections activity, are aggregated and evaluated to determine the total reserve for the class of receivable. Additionally, starting in the year ended December 31, 2024, for notes receivable, management evaluates standard receivables based on whether the customer is current (paying within 60 days of terms) or delinquent (paying outside of 60 days of terms).

On July 9, 2025, Genesis Healthcare, Inc. (“Genesis”) filed for Chapter 11 bankruptcy protection in the Northern District of Texas. As of December 31, 2025, the Company had outstanding accounts and notes receivable due from Genesis (prior to applying an allowance) of $50.4 million and $20.4 million, respectively. Upon review of the bankruptcy petition, the Company identified the Genesis accounts and note receivables as separate loss pools for evaluating the collectability of the receivables due to the size of the outstanding balances and the assessed unlikelihood of any potential recovery. As of December 31, 2025, the Company assessed a 100% allowance on the outstanding balances of both the accounts and notes receivable due from Genesis. In conjunction with recording the allowance for Genesis receivables, the Company recognized bad debt expense of $63.9 million during the year ended December 31, 2025.

Table of Contents

	Notes Receivable as of December 31, 2023
	Amortized Cost Basis by Origination Year
	2023		2022		2021		2020		2019		Prior		Total
	(in thousands)
Notes Receivable
Standard notes receivable1	$	18,175	$	25,505	$	855	$	1,529	$	3	$	21,033	$	67,100
Elevated risk notes receivable	$	—	$	—	$	7,259	$	—	$	—	$	—	$	7,259
Current-period gross write-offs	$	—	$	189	$	—	$	—	$	50	$	2,253	$	2,492
Current-period recoveries	—		—		—		—		—		—		—
Current-period net write-offs	$	—	$	189	$	—	$	—	$	50	$	2,253	$	2,492

ASC 326-20 - Financial Instruments - Credit Losses (“ASC 326-20”) permits entities to make an accounting policy election not to measure an estimate for credit losses on accrued interest if those entities write off accrued interest deemed uncollectible in a timely manner. The Company follows an income recognition policy on all interest earned on notes receivable. Under such policy the Company accounts for all notes receivable on a non-accrual basis and defers the recognition of any interest income until receipt of cash payments. This policy was established based on the Company’s history of collections of interest on outstanding notes receivable, as we do not deem it probable that we will receive substantially all interest on outstanding notes receivable. Accordingly, the Company does not record a credit loss adjustment for accrued interest. For the years ended December 31, 2025, 2024 and 2023, the Company recognized $3.6 million, $2.8 million and $2.8 million in interest income from notes receivable, respectively.

1.The ~~Company~~following ~~did~~tables ~~not~~present ~~identify~~the ~~delinquent~~Company’s tiers of notes receivable asfor athe ~~separate~~years ~~loss~~ended ~~pool~~December 31, ~~during~~2025 ~~the~~and ~~year~~2024, ~~ended~~respectively, ~~December~~further 31disaggregated by year of origination, ~~2023.~~as well as write-off activity:

The following tables provide information as to the status of payment on the Company’s gross notes receivable which were past due as of December 31, 2024 and 2023, respectively:


	Notes Receivable as of December 31, 2025
	Amortized Cost Basis by Origination Year
	2025		2024		2023		2022		2021		Prior		Total
	(in thousands)
Notes Receivable
Standard notes receivable	$	42,325	$	8,115	$	2,737	$	3,974	$	—	$	—	$	57,151
Delinquent notes receivable	$	535	$	134	$	684	$	1,811	$	405	$	—	$	3,569
Genesis note receivable	$	—	$	—	$	—	$	—	$	—	$	20,410	$	20,410
Elevated risk notes receivable	$	—	$	—	$	1,537	$	—	$	—	$	1,491	$	3,028

Current-period gross write-offs	$	—	$	6	$	326	$	—	$	121	$	—	$	453
Current-period recoveries	—		(278)		—		—		—		—		(278)
Current-period net write-offs	$	—	$	(272)	$	326	$	—	$	121	$	—	$	175

	Age Analysis of Past-Due Notes Receivable as of December 31, 2024
	Notes Receivable as of December 31, 2024
	0-90 Days		91 - 180 Days		Greater than 181 Days		Total
	Amortized Cost Basis by Origination Year
	(in thousands)
	2024		2023		2022		2021		2020		Prior		Total
Notes Receivable
	(in thousands)
Standard notes receivable	$	142	$	—	$	—	$	142
Notes Receivable
Delinquent notes receivable1	761		682		23,151		24,594
Standard notes receivable	$	53,592	$	7,282	$	15,743	$	—	$	—	$	—	$	76,617
Elevated risk notes receivable	225		225		2,429		2,879
Delinquent notes receivable	$	499	$	1,055	$	1,942	$	671	$	—	$	21,933	$	26,100
	$	1,128	$	907	$	25,580	$	27,615
Elevated risk notes receivable	$	—	$	1,537	$	—	$	—	$	1,491	$	—	$	3,028
Current-period gross write-offs	$	—	$	742	$	483	$	3,024	$	—	$	26	$	4,275
Current-period recoveries	—		—		—		—		—		—		—
Current-period net write-offs	$	—	$	742	$	483	$	3,024	$	—	$	26	$	4,275

1.Included within the Delinquent notes receivable past-due balance is the entire balance of notes receivable due from Genesis.

	Age Analysis of Past-Due Notes Receivable as of December 31, 2023
	0-90 Days		91 - 180 Days		Greater than 181 Days		Total
	(in thousands)
Notes Receivable
Standard notes receivable1	$	3,851	$	4,852	$	6,914	$	15,617
Elevated risk notes receivable	569		569		949		2,087
	$	4,420	$	5,421	$	7,863	$	17,704

1.The Company did not identify delinquent notes receivable as a separate loss pool during the year ended December 31, 2023.

Table of Contents

The following tables provide ainformation ~~summary~~as ofto the ~~changes~~status inof payment on the Company’s ~~allowance~~gross ~~for~~notes ~~doubtful~~receivable ~~accounts~~which onwere apast ~~portfolio~~due ~~segment~~as ~~basis~~of ~~for the years ended~~ December 31, ~~2024~~2025 and ~~2023~~2024, respectively:

	Allowance for doubtful accounts
	Age Analysis of Past-Due Notes Receivable as of December 31, 2025
Portfolio Segment:	December 31,2023		Reclassifications1		Write-Offs2		Bad Debt Expense		December 31,2024
	0 - 90 Days		91 - 180 Days		Greater than 181 Days		Total
	(in thousands)
Accounts receivable	$	80,819	$	—	$	(33,402)	$	40,103	$	87,520
Notes Receivable
Notes receivable
Standard notes receivable	$	403	$	—	$	—	$	403
Standard notes receivable	$	6,125	$	(2,615)	$	—	$	1,586	$	5,096
Delinquent notes receivable	335		139		2,827		3,301
Delinquent notes receivable1	—		2,615		(1,252)		4,663		6,026
Genesis notes receivable	—		—		20,410		20,410
Elevated risk notes receivable	~~4,755~~—		—		(3,~~023)~~029		~~408~~3,029		~~2,140~~
Total notes receivable	$	~~10,880~~738	$	—139	$	(426,~~275)~~266	$	627,~~657~~143	$	~~13,262~~
Total accounts and notes receivable	$	91,699	$	—	$	(37,677)	$	46,760	$	100,782

1.Delinquent notes receivable were identified as a new loss pool during the year ended December 31, 2024.


	Age Analysis of Past-Due Notes Receivable as of December 31, 2024
	0 - 90 Days		91 - 180 Days		Greater than 181 Days		Total
	(in thousands)
Notes Receivable
Standard notes receivable	$	142	$	—	$	—	$	142
Delinquent notes receivable1	761		682		23,151		24,594
Elevated risk notes receivable	225		225		2,429		2,879
Total notes receivable	$	1,128	$	907	$	25,580	$	27,615

21.~~Write-offs~~The ~~are~~balance ~~shown net~~ of ~~recoveries.~~delinquent ~~During~~notes ~~the~~receivable ~~year~~as ~~ended~~of December 31, 2024, includes the ~~Company~~principal ~~collected~~balance ~~$0.1 million~~ of ~~accounts~~the ~~receivables~~note ~~that~~due ~~were~~from ~~recovered subsequent to being written-off~~Genesis.

	Allowance for doubtful accounts
Portfolio Segment:	December 31,2022		Write-Offs1		Bad Debt Expense		December 31,2023
	(in thousands)
Accounts receivable	$	66,601	$	(14,877)	$	29,095	$	80,819
Notes receivable
Standard notes receivable2	$	6,052	$	(1,646)	$	1,719	$	6,125
Elevated risk notes receivable	811		(846)		4,790		4,755
Total notes receivable	$	6,863	$	(2,492)	$	6,509	$	10,880
Total accounts and notes receivable	$	73,464	$	(17,369)	$	35,604	$	91,699

The following tables provide a summary of the changes in the Company’s allowance for doubtful accounts on a portfolio segment basis for the years ended December 31, 2025 and 2024, respectively:

1.Write-offs are shown net of recoveries. During the year ended December 31, 2023, the Company collected $0.2 million of accounts receivables that were recovered subsequent to being written-off.


	Allowance for doubtful accounts
Portfolio Segment:	December 31, 2024		Reclassifications1		Write-Offs2		Bad Debt Expense		December 31, 2025
	(in thousands)
Accounts receivable
Aged accounts receivable	$	87,520	$	(1,651)	$	(36,674)	$	19,715	$	68,910
Genesis accounts receivable1	—		1,651		—		48,744		50,395
Total accounts receivable	$	87,520	$	—	$	(36,674)	$	68,459	$	119,305

Notes receivable
Standard notes receivable	$	5,096	$	—	$	278	$	(1,787)	$	3,587
Delinquent notes receivable	6,026		(5,176)		(453)		873		1,270
Genesis notes receivable1	—		5,176		—		15,234		20,410
Elevated risk notes receivable	2,140		—		—		300		2,440
Total notes receivable	$	13,262	$	—	$	(175)	$	14,620	$	27,707
Total accounts and notes receivable	$	100,782	$	—	$	(36,849)	$	83,079	$	147,012

21.~~The~~Genesis ~~Company~~accounts ~~did~~and ~~not identify delinquent~~ notes receivable aswere aidentified ~~separate~~as new loss ~~pool~~pools during the year ended December 31, ~~2023~~2025.

2.Write-offs are shown net of recoveries. During the year ended December 31, 2025, the Company collected $0.3 million of accounts and notes receivable that were recovered subsequent to being written-off.

Table of Contents

Note 5 — Changes in Accumulated Other Comprehensive Loss by Component


	Allowance for doubtful accounts
Portfolio Segment:	December 31, 2023		Reclassifications1		Write-Offs2		Bad Debt Expense		December 31, 2024
	(in thousands)
Accounts receivable	$	80,819	$	—	$	(33,402)	$	40,103	$	87,520

Notes receivable
Standard notes receivable	$	6,125	$	(2,615)	$	—	$	1,586	$	5,096
Delinquent notes receivable1	—		2,615		(1,252)		4,663		6,026
Elevated risk notes receivable	4,755		—		(3,023)		408		2,140
Total notes receivable	$	10,880	$	—	$	(4,275)	$	6,657	$	13,262
Total accounts and notes receivable	$	91,699	$	—	$	(37,677)	$	46,760	$	100,782

~~For~~1.Delinquent ~~the~~notes ~~years~~receivable ~~ended~~was ~~December 31,~~identified ~~2024,~~as ~~2023~~a ~~and~~new ~~2022, the Company’s accumulated other comprehensive~~ loss ~~consisted~~pool ofduring ~~unrealized gains and losses from~~ the ~~Company’s~~year ~~available-for-sale~~ended ~~marketable~~December ~~securities and restricted marketable securities. The following tables provide a summary of the changes in accumulated other comprehensive loss~~31, ~~net of taxes:~~2024.

	Unrealized Gains and (Losses) on Available-for-Sale Securities1
	Year Ended December 31,
	2024		2023		2022
	(in thousands)
Accumulated other comprehensive (loss) income — beginning balance	$	(1,844)	$	(3,477)	$	4,000
Other comprehensive (loss) income before reclassifications	(753)		1,624		(7,505)
Losses reclassified from other comprehensive (loss) income²	280		9		28
Net current period other comprehensive (loss) income³	(473)		1,633		(7,477)
Accumulated other comprehensive loss — ending balance	$	(2,317)	$	(1,844)	$	(3,477)

2.Write-offs are shown net of recoveries. During the year ended December 31, 2024, the Company collected $0.2 million of accounts receivables that were recovered subsequent to being written-off.

1.All amounts are net of tax.

2.Realized gains and losses were recorded pre-tax under “Investment and other income (loss), net” in the Consolidated Statements of Comprehensive Income. For the year ended December 31, 2024, the Company recorded $0.4 million of realized losses from the sale of available-for-sale securities. For the years ended December 31, 2023 and 2022, the Company recorded less than $0.1 million of realized losses from the sale of available-for-sale securities. Refer to Note 9 — Fair Value Measurements herein for further information.

3.For the year ended December 31, 2024, the change in accumulated other comprehensive loss was net of a tax benefit of $0.1 million. For the years ended December 31, 2023 and 2022, the changes in accumulated other comprehensive loss were net of a tax expense of $0.4 million and benefit of $2.0 million, respectively.

	Amounts Reclassified from Accumulated Other Comprehensive (Loss) Income
	Year Ended December 31,
	2024		2023		2022
	(in thousands)
Losses from the sale of available-for-sale securities	$	(355)	$	(12)	$	(37)
Tax benefit	75		3		9
Net loss reclassified from accumulated other comprehensive income	$	(280)	$	(9)	$	(28)

Table of Contents

Note 6 — ~~Property~~Changes ~~and~~in ~~Equipment~~Accumulated Other Comprehensive Loss by Component

~~Property~~For ~~and~~the ~~equipment~~years ~~are~~ended ~~recorded~~December 31, at2025, ~~cost.~~2024 ~~Depreciation~~and is2023, ~~recorded over~~ the ~~estimated~~Company’s ~~useful~~accumulated ~~life~~other ofcomprehensive ~~each~~loss ~~class~~consisted of ~~depreciable~~unrealized ~~asset~~gains and islosses ~~computed~~from ~~using~~ the ~~straight~~Company’s available-~~line~~for-sale ~~method.~~marketable ~~Leasehold~~securities ~~improvements~~and ~~are~~restricted ~~amortized~~marketable ~~over~~securities. ~~the~~The ~~shorter~~following oftables ~~the~~provide ~~estimated~~a ~~asset~~summary ~~life or term~~ of the ~~lease.~~changes ~~Repairs~~in ~~and~~accumulated ~~maintenance~~other ~~costs~~comprehensive ~~are~~loss, ~~charged~~net toof ~~expense as incurred.~~taxes:

The following table sets forth the amounts of property and equipment by each class of depreciable asset as of December 31, 2024 and December 31, 2023:


	Unrealized Gains and (Losses) on Available-for-Sale Securities1
	Year Ended December 31,
	2025		2024		2023
	(in thousands)
Accumulated other comprehensive loss — beginning balance	$	(2,317)	$	(1,844)	$	(3,477)
Other comprehensive income (loss) before reclassifications	2,015		(753)		1,624
(Loss) income reclassified from other comprehensive loss²	(146)		280		9
Net current period other comprehensive income (loss)³	1,869		(473)		1,633
Accumulated other comprehensive loss — ending balance	$	(448)	$	(2,317)	$	(1,844)

	December 31, 2024		December 31, 2023
	(in thousands)
Housekeeping and Dietary equipment	$	17,052	$	15,764
Computer hardware and software	8,196		6,870
Operating lease — right-of-use assets	29,669		27,099
Other1	904		1,070
Total property and equipment, at cost	55,821		50,803
Less accumulated depreciation2	27,623		22,029
Total property and equipment, net	$	28,198	$	28,774

1.All amounts are net of tax.

12.~~Includes~~Realized ~~furniture~~gains and ~~fixtures~~losses were recorded pre-tax under “Investment and other income, ~~leasehold~~net” ~~improvements~~in the Consolidated Statements of Comprehensive Income. For the years ended December 31, 2025, 2024 and ~~autos~~2023, the Company recorded $0.2 million of realized gains, $0.4 million of realized losses, and ~~trucks~~less than $0.1 million in realized losses, respectively from the sale of available-for-sale securities. Refer to Note 10 — Fair Value Measurements herein for further information.

23.~~Includes~~For ~~$13.2 million~~the ~~and~~year ~~$9.4~~ended December ~~million~~31, ~~related~~2025, tothe change in accumulated ~~depreciation~~other oncomprehensive ~~Operating~~loss ~~lease~~was –net ~~right-~~of~~-use~~ ~~assets~~a astax expense of $0.4 million. For the years ended December 31, 2024 and 2023, the change in accumulated other comprehensive loss was net of a tax benefit of $0.1 million and expense of $0.4 million, respectively.

Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was $11.9 million, $10.5 million, and $10.5 million, respectively. Of the depreciation expense recorded for the years ended December 31, 2024, 2023 and 2022, $7.8 million, $6.4 million and $6.1 million related to the depreciation of the Company’s operating lease - right-of-use assets (“ROU Assets”), respectively.


	Amounts Reclassified from Accumulated Other Comprehensive Loss
	Year Ended December 31,
	2025		2024		2023
	(in thousands)
Gains (losses) from the sale of available-for-sale securities	$	185	$	(355)	$	(12)
Tax (expense) benefit	(39)		75		3
Net gain (loss) reclassified from accumulated other comprehensive income	$	146	$	(280)	$	(9)

At December 31, 2024, 2023 and 2022, accrued purchases of property and equipment were $0.5 million, $0.7 million, and $0.3 million, respectively.

Note 7 — Leases

The Company recognizes ROU Assets and lease liabilities for automobiles, office buildings, IT equipment and small storage units for the temporary storage of operational equipment. The Company’s leases have remaining lease terms ranging from less than 1 year to 5 years. The Company recognizes extension options as part of the initial lease term for ROU Assets and lease liabilities when it is reasonably certain that the Company will exercise the extension option upon the completion of the initial lease term. Most leases include the option to terminate the lease within 1 year.

The Company uses practical expedients offered under the ASC 842 - Leases (“ASC 842”) to combine lease and non-lease components within leasing arrangements and to recognize the payments associated with short-term leases in earnings on a straight-line basis over the lease term, with the cost associated with variable lease payments recognized when incurred. These accounting policy elections impact the value of the Company’s ROU Assets and lease liabilities. The value of the Company’s ROU Assets is determined as the carrying value of its leasing arrangements and is recorded in Property and equipment, net on the Company’s Consolidated Balance Sheets. The value of the Company’s lease liabilities is the present value of fixed lease payments not yet paid, which is discounted using either the rate implicit in the lease contract if that rate can be determined or the Company’s incremental borrowing rate (“IBR”) and is recorded in Other accrued expenses and current liabilities and Lease liability — long-term on the Company’s Consolidated Balance Sheets. The Company’s IBR is determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.

Any future lease payments that are not fixed based on the terms of the lease contract, or fluctuate based on a factor other than an index or rate, are considered variable lease payments and are not included in the value of the Company’s ROU Assets or lease liabilities. The Company’s variable lease payments are mostly incurred from automobile leases and relate to miscellaneous transportation costs including repair costs, insurance, and terminal rental adjustment payments due at lease settlement. Such rental adjustment payments can result in a reduction to the Company’s total variable lease payments.

Table of Contents

AsNote ~~of December 31, 2024 and 2023, the Company’s short-term portion of lease obligations were $8.4 million and $~~7.4 ~~million, respectively, and are recorded in Other accrued expenses and current liabilities with the remaining balance recognized under the Lease liability~~ — ~~long-term~~Property ~~portion caption on the Company’s Consolidated Balance Sheets. The corresponding expense for the Company’s lease commitments are primarily recorded in selling, general~~ and ~~administrative expense on the Company’s Consolidated Statements of Comprehensive Income.~~Equipment

~~Components~~Property and equipment are recorded at cost. Depreciation is recorded over the estimated useful life of ~~lease~~each ~~expense~~class of depreciable asset and is computed using the straight-line method. Leasehold improvements are ~~presented~~amortized ~~below~~over ~~for~~the shorter of the ~~years~~estimated ~~ended~~asset ~~December 31,~~life ~~2024,~~or ~~2023~~term of the lease. Repairs and ~~2022~~maintenance costs are charged to expense as incurred.

	Year Ended December 31,
	2024		2023		2022
	(in thousands)
Lease cost
Operating lease cost	$	7,799	$	6,400	$	5,673
Short-term lease cost	883		1,037		1,265
Variable lease cost	1,609		1,952		857
Total lease cost	$	10,291	$	9,389	$	7,795

The following table sets forth the amounts of property and equipment by each class of depreciable asset as of December 31, 2025 and December 31, 2024:

Supplemental information is presented below for the years ended December 31, 2024, 2023 and 2022.


	December 31, 2025		December 31, 2024
	(in thousands)
EVS and Dietary equipment	$	18,571	$	17,052
Computer hardware and software	9,185		8,196
Operating lease — right-of-use assets	30,933		29,669
Other1	1,145		904
Total property and equipment, at cost	59,834		55,821
Less accumulated depreciation2	32,248		27,623
Total property and equipment, net	$	27,586	$	28,198

	Year Ended December 31,
	2024			2023			2022
	(dollar amounts in thousands)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	8,125		$	6,808		$	6,385
ROU Assets obtained in exchange for lease obligations	3,721			6,064			1,650
Weighted-average remaining lease term — operating leases	2.6 years			3.3 years			4.2 years
Weighted-average discount rate — operating leases	6.3		%	6.6		%	4.4		%

1.Includes furniture and fixtures, leasehold improvements and automobiles and trucks.

~~During~~2.Includes ~~the years ended December~~$16.7 ~~31,~~million ~~2024~~ and ~~2023,~~$13.2 million ~~the~~related ~~Company’s~~to ~~ROU~~accumulated ~~Assets~~depreciation ~~and~~on Operating lease ~~liabilities~~– ~~were~~right-of-use ~~reduced~~assets byas ~~$0.8 million~~of ~~and $2.7~~December ~~million~~31, ~~respectively~~2025 ~~due~~and to2024, ~~lease cancellations~~respectively.

~~The~~Depreciation ~~following~~expense isfor athe ~~schedule~~years byended ~~calendar~~December 31, ~~year~~2025, of2024 ~~future~~and ~~minimum~~2023 ~~lease~~was ~~payments~~$13.0 ~~under~~million, ~~operating~~$11.9 ~~leases~~million, ~~that~~and ~~have~~$10.5 ~~remaining~~million, ~~terms~~respectively. asOf ofthe depreciation expense recorded for the years ended December 31, 2025, 2024: and 2023, $8.3 million, $7.8 million and $6.4 million related to the depreciation of the Company’s operating lease — right-of-use assets (“ROU Assets”), respectively.

Period/Year	Operating Leases
	(in thousands)
2025	$	8,420
2026	5,746
2027	2,264
2028	1,389
2029	116
Thereafter	—
Total minimum lease payments	$	17,935
Less: imputed lease payments	1,480
Present value of lease liabilities	$	16,455

At December 31, 2025, 2024 and 2023, accrued purchases of property and equipment were $0.3 million, $0.5 million, and $0.7 million, respectively.

Note 8 — Leases

The Company recognizes ROU Assets and lease liabilities for automobiles, office buildings, IT equipment and small storage units for the temporary storage of operational equipment. The Company’s leases have remaining lease terms ranging from less than 1 year to 10 years. The Company recognizes extension options as part of the initial lease term for ROU Assets and lease liabilities when it is reasonably certain that the Company will exercise the extension option upon the completion of the initial lease term. Most leases include the option to terminate the lease within 1 year.

The Company uses practical expedients offered under the ASC 842 - Leases (“ASC 842”) to combine lease and non-lease components within leasing arrangements and to recognize the payments associated with short-term leases in earnings on a straight-line basis over the lease term, with the cost associated with variable lease payments recognized when incurred. These accounting policy elections impact the value of the Company’s ROU Assets and lease liabilities. The value of the Company’s ROU Assets is determined as the carrying value of its leasing arrangements and is recorded in Property and equipment, net on the Company’s Consolidated Balance Sheets. The value of the Company’s lease liabilities is the present value of fixed lease payments not yet paid, which is discounted using either the rate implicit in the lease contract if that rate can be determined or the Company’s incremental borrowing rate (“IBR”). The Company’s IBR is determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.

Any future lease payments that are not fixed based on the terms of the lease contract, or fluctuate based on a factor other than an index or rate, are considered variable lease payments and are not included in the value of the Company’s ROU Assets or lease liabilities. The Company’s variable lease payments are mostly incurred from automobile leases and relate to miscellaneous transportation costs including repair costs, insurance and terminal rental adjustment payments due at lease settlement. Such rental adjustment payments can result in a reduction to the Company’s total variable lease payments.

Table of Contents

~~Note~~As of December 31, 2025 and 2024, the Company’s short-term portion of lease obligations were $5.4 million and $8.4 —million, ~~Goodwill~~respectively, and are recorded in Other ~~Intangible~~accrued ~~Assets~~expenses and current liabilities with the remaining balance recognized under the Lease liability — long-term portion caption on the Company’s Consolidated Balance Sheets. The corresponding expense for the Company’s lease commitments are primarily recorded in selling, general and administrative expenses on the Company’s Consolidated Statements of Comprehensive Income.

~~Goodwill~~Components of lease expense are presented below for the years ended December 31, 2025, 2024 and 2023.

Goodwill represents the excess of the purchase price over the fair value of net assets of acquired businesses. Goodwill is not amortized but is evaluated for impairment on an annual basis or more frequently if impairment indicators arise. To date, the Company has not recognized an impairment of its goodwill.


	Year Ended December 31,
	2025		2024		2023
	(in thousands)
Lease cost
Operating lease cost	$	8,322	$	7,799	$	6,400
Short-term lease cost	819		883		1,037
Variable lease cost	1,987		1,609		1,952
Total lease cost	$	11,128	$	10,291	$	9,389

~~The~~Supplemental ~~following~~information ~~table~~is ~~sets~~presented ~~forth~~below for the ~~amounts~~years ofended ~~goodwill by reportable segment as of~~ December 31, 2025, 2024 and 2023:.

	December 31, 2024					December 31, 2023
			Year Ended December 31,
	(in thousands)
			2025					2024			2023
Housekeeping	$	42,377				$	42,377
			(dollar amounts in thousands)
Dietary	33,152					33,152
Other information
Total Goodwill	$	75,529				$	75,529
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases			$	8,436				$	8,125		$	6,808
ROU Assets obtained in exchange for lease obligations			12,489					3,721			6,064
Weighted-average remaining lease term — operating leases			5.6 years					2.6 years			3.3 years
Weighted-average discount rate — operating leases			6.6		%			6.3		%	6.6		%

~~Intangible~~During the years ended December 31, 2025 and 2024, the Company’s ROU Assets and lease liabilities were reduced by $2.5 million and $0.8 million, respectively due to lease cancellations.

The ~~Company’s~~following ~~other~~is ~~intangible~~a ~~assets~~schedule ~~consist~~by ofcalendar ~~customer~~year ~~relationships, trade names, patents and non-compete agreements which were obtained through acquisitions and are recorded at their fair values at the date~~ of ~~acquisition.~~future ~~The~~minimum ~~following~~lease ~~table~~payments ~~sets~~under ~~forth~~operating ~~the~~leases ~~amounts~~that ofhave ~~other~~remaining ~~intangible~~terms ~~assets~~ as of December 31, ~~2024 and 2023~~2025:

	December 31, 2024								December 31, 2023
Period/Year			Operating Leases
	Gross Amount				Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
			(in thousands)
	(in thousands)
2026			$	5,367
Customer relationships	$	45,634			$	38,093	$	7,541	$	45,634	$	35,718	$	9,916
2027			3,635
Trade names	1,731				466		1,265		1,731		329		1,402
2028			1,683
Patents	1,086				505		581		1,086		369		717
2029			1,213
Non-compete agreements	233				178		55		233		141		92
2030			1,235
Total other intangible assets	$	48,684			$	39,242	$	9,442	$	48,684	$	36,557	$	12,127
Thereafter			4,605
Total minimum lease payments			$	17,738
Less: imputed lease payments			2,722
Present value of lease liabilities			$	15,016

No acquisitions occurred during the year ended December 31, 2024. Intangible assets with determinable useful lives are amortized on a straight-line basis over their estimated useful lives. The weighted-average amortization period of customer relationships, trade names, patents, and non-compete agreements are approximately 10 years, 13 years, 8 years, and 4 years, respectively.

The following table sets forth the estimated amortization expense for intangibles subject to amortization for 2025, the following four fiscal years and thereafter:

Period/Year	Total Amortization Expense
	(in thousands)
2025	$	2,685
2026	$	2,666
2027	$	1,195
2028	$	613
2029	$	509
Thereafter	$	1,774
Total	$	9,442

Amortization expense for the years ended December 31, 2024, 2023 and 2022 was $2.7 million, $3.8 million and $4.9 million, respectively.

Table of Contents

Note 9 — ~~Fair~~Goodwill ~~Value~~and ~~Measurements~~Other Intangible Assets

The Company’s current assets and current liabilities are financial instruments and most of these items (other than marketable securities, restricted marketable securities, inventories and supplies and the short-term portion of deferred compensation assets and liabilities) are recorded at cost in the Consolidated Balance Sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature. The carrying value of the Company’s line of credit represents the outstanding amount of the borrowings, which approximates fair value. The Company’s financial assets that are measured at fair value on a recurring basis are its marketable securities, restricted marketable securities and deferred compensation funding. The recorded values of all of the financial instruments approximate their current fair values because of their nature, stated interest rates and respective maturity dates or durations.Goodwill

~~The~~Goodwill ~~Company’s~~represents ~~marketable securities and restricted marketable securities are held by~~ the ~~Company’s~~excess ~~captive insurance company to satisfy capital requirements~~ of the ~~state~~purchase ~~regulator~~price ~~related~~over ~~to captive insurance companies. Restricted marketable securities are held by~~ the Company’s captive insurance company as collateral for certain insurance coverages. Such securities are primarily comprised of municipal bonds, treasury notes, corporate bonds and other government bonds which are classified as available-for-sale and are reported at fair value. ~~Unrealized~~of ~~gains and losses associated with these investments are included in Unrealized (loss) gain on available-for-sale marketable securities,~~ net ofassets ~~taxes within the Consolidated Statements~~ of ~~Comprehensive~~acquired ~~Income~~businesses. ~~Marketable~~Goodwill ~~securities~~is and restricted marketable securities are classified within Level 2 of the fair value hierarchy, as these securities are measured using quoted prices for identical or similar instruments in markets that are not ~~active~~amortized ~~and~~but ~~model-based~~is ~~valuation~~evaluated ~~techniques~~ for ~~which~~impairment ~~all~~on ~~significant~~an ~~assumptions~~annual ~~are~~basis ~~observable.~~or ~~Such~~more ~~valuations~~frequently ~~are~~if ~~determined~~impairment byindicators ~~a third-party pricing service~~arise. ~~For~~To ~~the year ended December 31~~date, ~~2024,~~ the Company ~~recorded~~has ~~unrealized~~not ~~losses,~~recognized ~~net~~an ofimpairment ~~taxes~~ of $0its goodwill.5 ~~million~~One onacquisition ~~marketable~~occurred ~~securities.~~during ~~For~~ the ~~years~~year ended December 31, ~~2023 and 2022, the Company recorded unrealized gains, net of taxes of $1~~2025.~~6 million and unrealized losses, net of taxes of $7.5 million on marketable securities, respectively.~~

~~For~~The ~~the~~following ~~years~~table ~~ended~~sets ~~December 31,~~forth ~~2024, 2023 and 2022,~~ the ~~Company~~amounts ~~received total proceeds, less the amount~~ of ~~interest~~goodwill ~~received,~~by ofreportable ~~$67.0~~segment ~~million,~~as ~~$2.0 million and $10.4 million, respectively, from sales~~ of ~~available-for-sale securities. These sales resulted in realized losses of $0.4 million for the year ended~~ December 31, ~~2024~~2025 and realized losses of less than $0.1 million for the years ended December 31, 2023 and 2022. Such gains and losses were recorded in Investment and other income (loss), net in the Consolidated Statements of Comprehensive Income. The basis for the sale of these securities was the specific identification of each security sold during the period.2024:

As part of a prior period acquisition of a prepackaged meal manufacturer, the Company agreed to pay royalties to the seller on all future product sales. The Company records a liability for the expected future payments within Other long-term liabilities on the Consolidated Balance Sheets. The fair value of this liability is measured using forecasted sales models (Level 3). For the years ended December 31, 2024, 2023 and 2022, the Company recorded realized gains of $0.6 million, $1.1 million and $2.4 million, respectively, within Costs of services provided in the Consolidated Statements of Comprehensive Income related to the measurement of the liability at each balance sheet date.


	December 31, 2024		Acquisition		December 31, 2025
	(in thousands)
Environmental Services	$	42,377	$	4,268	$	46,645
Dietary	33,152		—		33,152
Total Goodwill	$	75,529	$	4,268	$	79,797

~~The~~Intangible investments under the deferred compensation plan are accounted for as trading securities and unrealized gains or losses are recorded within Investment and other income (loss), net in the Consolidated Statements of Comprehensive Income. The fair values of these investments are determined based on quoted market prices (Level 1) or the net asset value (“NAV”) of underlying share investments (Level 2). For the years ended December 31, 2024, 2023 and 2022, the Company recorded unrealized gains of $8.3 million, unrealized gains of $6.6 million and unrealized losses of $9.3 million, respectively, related to trading securities still held at the respective reporting dates.Assets

The Company’s other intangible assets consist of customer relationships, trade names, patents and non-compete agreements which were obtained through acquisitions and are recorded at their fair values at the date of acquisition. The following table sets forth the amounts of other intangible assets as of December 31, 2025 and 2024:


	December 31, 2025						December 31, 2024
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
	(in thousands)
Customer relationships	$	46,514	$	40,647	$	5,867	$	45,634	$	38,093	$	7,541
Trade names	2,112		1,028		1,084		1,731		466		1,265
Patents	1,086		1,086		—		1,086		505		581
Non-compete agreements	183		170		13		233		178		55
Total other intangible assets	$	49,895	$	42,931	$	6,964	$	48,684	$	39,242	$	9,442

Intangible assets with determinable useful lives are amortized on a straight-line basis over their estimated useful lives. The weighted-average amortization period of customer relationships, trade names, patents, and non-compete agreements are approximately 10 years, 10 years, 4 years, and 4 years, respectively.

The following table sets forth the estimated amortization expense for intangibles subject to amortization for 2026, the following four fiscal years and thereafter:


Period/Year	Total Amortization Expense
	(in thousands)
2026	$	2,593
2027	$	1,127
2028	$	545
2029	$	545
2030	$	545
Thereafter	$	1,609
Total	$	6,964

Amortization expense for the years ended December 31, 2025, 2024 and 2023 was $3.7 million, $2.7 million and $3.8 million, respectively.

Table of Contents

~~The~~Note ~~following~~10 ~~table~~— ~~summarizes~~Fair ~~the~~Value contractual maturities of debt securities held as of December 31, 2024 and 2023 which are classified within “Marketable securities, at fair value” and “Restricted marketable securities, at fair value” in the Consolidated Balance Sheets:Measurements

	Debt Securities — Available-for-Sale
Contractual maturity:	December 31, 2024		December 31, 2023
	(in thousands)
Marketable securities, at fair value
Maturing in one year or less	$	653	$	6,324
Maturing in second year through fifth year	23,341		34,939
Maturing in sixth year through tenth year	13,113		39,309
Maturing after ten years	13,428		12,559
Total marketable securities, at fair value	$	50,535	$	93,131
Restricted marketable securities, at fair value
Maturing in one year or less	$	2,474	$	—
Maturing in second year through fifth year	15,774		—
Maturing in sixth year through tenth year	5,837		—
Maturing after ten years	1,020		—
Total restricted marketable securities, at fair value	$	25,105	$	—
Total debt securities — available-for-sale	$	75,640	$	93,131

The Company’s marketable securities and restricted marketable securities are held by the Company’s captive insurance company to satisfy capital requirements of the state regulator related to captive insurance companies. Restricted marketable securities are held by the Company’s captive insurance company as collateral for certain insurance coverages. Such securities are primarily comprised of municipal bonds, treasury notes, corporate bonds and other government bonds which are classified as available-for-sale and are reported at fair value. Unrealized gains and losses associated with these investments are included in Unrealized gain (loss) on available-for-sale marketable securities, net of taxes within the Consolidated Statements of Comprehensive Income. Marketable securities and restricted marketable securities are classified within Level 2 of the fair value hierarchy, as these securities are measured using quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable. Such valuations are determined by a third-party pricing service. For the years ended December 31, 2025, 2024 and 2023, the Company recorded unrealized gains, net of taxes of $1.9 million, unrealized losses, net of taxes of $0.5 million and unrealized gains, net of taxes of $1.6 million on marketable securities, respectively.

For the years ended December 31, 2025, 2024 and 2023, the Company received total proceeds, less the amount of interest received, of $23.2 million, $67.0 million and $2.0 million, respectively, from sales of available-for-sale securities. These sales resulted in realized gains of $0.2 million for the year ended December 31, 2025 and realized losses of $0.4 million and less than $0.1 million for the years ended December 31, 2024 and 2023, respectively. Such gains and losses were recorded in Investment and other income, net in the Consolidated Statements of Comprehensive Income. The basis for the sale of these securities was the specific identification of each security sold during the period.

As part of a prior period acquisition of a prepackaged meal manufacturer, the Company agreed to pay royalties to the seller on all future product sales. The Company records a liability for the expected future payments within Other long-term liabilities on the Consolidated Balance Sheets. The fair value of this liability is measured using forecasted sales models (Level 3). For the years ended December 31, 2025, 2024 and 2023, the Company recorded realized gains of $0.4 million, $0.6 million and $1.1 million, respectively, within Costs of services provided in the Consolidated Statements of Comprehensive Income related to the measurement of the liability at each balance sheet date.

The investments under the deferred compensation plan are accounted for as trading securities and unrealized gains or losses are recorded within Investment and other income, net in the Consolidated Statements of Comprehensive Income. The fair values of these investments are determined based on quoted market prices (Level 1) or the net asset value (“NAV”) of underlying share investments (Level 2). For the years ended December 31, 2025, 2024 and 2023, the Company recorded unrealized gains of $7.3 million, $8.3 million and $6.6 million, respectively, related to trading securities still held at the respective reporting dates.

Table of Contents

The following ~~tables~~table ~~provide~~summarizes ~~fair~~the ~~value~~contractual ~~measurement~~maturities ~~information~~of ~~for~~debt ~~the~~securities ~~Company’s~~held ~~financial~~as ~~assets~~of December 31, ~~including~~2025 ~~marketable~~and 2024 which are classified within “Marketable securities, ~~restricted~~at ~~marketable~~fair ~~securities~~value” and ~~deferred~~“Restricted ~~compensation~~marketable ~~fund~~securities, ~~investments~~at asfair ofvalue” ~~December 31,~~in ~~2024~~the ~~and~~Consolidated ~~2023~~Balance Sheets:

	As of December 31, 2024
			Debt Securities — Available-for-Sale
									Fair Value Measurement Using:
Contractual maturity:			December 31, 2025				December 31, 2024
(amounts in thousands)	Carrying Amount				Total Fair Value				Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities, at fair value
Marketable securities
Maturing in one year or less			$	4,424			$	653
Municipal bonds — taxable	$	9,600			$	9,600			$	—	$	9,600	$	—
Maturing in second year through fifth year			10,850				23,341
Municipal bonds — non-taxable	40,935				40,935				—		40,935		—
Maturing in sixth year through tenth year			21,962				13,113
Total marketable securities	$	50,535			$	50,535			$	—	$	50,535	$	—
Maturing after ten years			5,538				13,428
Restricted marketable securities
Total marketable securities, at fair value			$	42,774			$	50,535
U.S. treasury bonds	$	7,309			$	7,309			$	—	$	7,309	$	—
Restricted marketable securities, at fair value
U.S. government agency bonds	1,218				1,218				—		1,218		—
Maturing in one year or less			$	4,635			$	2,474
International fixed income bonds	652				652				—		652		—
Maturing in second year through fifth year			15,011				15,774
Corporate bonds	6,796				6,796				—		6,796		—
Maturing in sixth year through tenth year			9,653				5,837
Municipal bonds — taxable	9,130				9,130				—		9,130		—
Maturing after ten years			1,053				1,020
Total restricted marketable securities	$	25,105			$	25,105			$	—	$	25,105	$	—
Total restricted marketable securities, at fair value			$	30,352			$	25,105
Deferred compensation plan
Total debt securities — available-for-sale			$	73,126			$	75,640
Money market1	$	1,961			$	1,961			$	—	$	1,961	$	—
Commodities	295				295				295		—		—
Fixed income	4,417				4,417				4,417		—		—
International	4,999				4,999				4,999		—		—
Large cap blend	6,669				6,669				6,669		—		—
Large cap growth	18,524				18,524				18,524		—		—
Large cap value	6,964				6,964				6,964		—		—
Mid cap blend	3,957				3,957				3,957		—		—
Real estate	372				372				372		—		—
Small cap blend	2,980				2,980				2,980		—		—
Deferred compensation plan2	$	51,138			$	51,138			$	49,177	$	1,961	$	—

Table of Contents

	As of December 31, 2023
					Fair Value Measurement Using:
(amounts in thousands)	CarryingAmount		Total FairValue		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities
Municipal bonds — non-taxable	$	93,131	$	93,131	$	—	$	93,131	$	—
Deferred compensation plan
Money market1	$	2,007	$	2,007	$	—	$	2,007	$	—
Commodities	298		298		298		—		—
Fixed income	4,254		4,254		4,254		—		—
International	4,621		4,621		4,621		—		—
Large cap blend	5,053		5,053		5,053		—		—
Large cap growth	13,886		13,886		13,886		—		—
Large cap value	5,964		5,964		5,964		—		—
Mid cap blend	3,192		3,192		3,192		—		—
Real estate	374		374		374		—		—
Small cap blend	2,664		2,664		2,664		—		—
Deferred compensation plan2	$	42,313	$	42,313	$	40,306	$	2,007	$	—

The following tables provide fair value measurement information for the Company’s financial assets, including marketable securities, restricted marketable securities and deferred compensation fund investments as of December 31, 2025 and 2024:

1.The fair value of the money market is based on the NAV of the shares held by the plan at the end of the period. The money market fund includes short-term United States dollar denominated money market instruments and the NAV is determined by the custodian of the fund. The money market fund can be redeemed at its NAV at the measurement date as there are no significant restrictions on the ability to sell this investment.


	As of December 31, 2025
					Fair Value Measurement Using:
(amounts in thousands)	Carrying Amount		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities
Municipal bonds — taxable	$	4,046	$	4,046	$	—	$	4,046	$	—
Municipal bonds — non-taxable	38,728		38,728		—		38,728		—
Total marketable securities	$	42,774	$	42,774	$	—	$	42,774	$	—

Restricted marketable securities
U.S. treasury bonds	$	10,037	$	10,037	$	—	$	10,037	$	—
U.S. government agency bonds	1,215		1,215		—		1,215		—
International fixed income bonds	736		736		—		736		—
Corporate bonds	8,858		8,858		—		8,858		—
Municipal bonds — taxable	9,506		9,506		—		9,506		—
Total restricted marketable securities	$	30,352	$	30,352	$	—	$	30,352	$	—

Deferred compensation plan
Money market1	$	1,965	$	1,965	$	—	$	1,965	$	—
Commodities	361		361		361		—		—
Fixed income	5,190		5,190		5,190		—		—
International	6,320		6,320		6,320		—		—
Large cap blend	8,513		8,513		8,513		—		—
Large cap growth	20,425		20,425		20,425		—		—
Large cap value	7,485		7,485		7,485		—		—
Mid cap blend	4,059		4,059		4,059		—		—
Real estate	389		389		389		—		—
Small cap blend	3,438		3,438		3,438		—		—
Deferred compensation plan2	$	58,145	$	58,145	$	56,180	$	1,965	$	—

2.The deferred compensation plan carrying amounts and total fair value amounts as of December 31, 2024 and 2023 are inclusive of $1.5 million each of holdings expected to be paid to former employees within the next twelve months which were recorded under Prepaid expenses and other assets in the Company’s Consolidated Balance Sheets.

Table of Contents

The following table shows the amortized cost, unrealized gains and losses, and estimated fair value of the Company’s debt securities as of December 31, 2024 and 2023:


	As of December 31, 2024
					Fair Value Measurement Using:
(amounts in thousands)	Carrying Amount		Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities
Municipal bonds — taxable	$	9,600	$	9,600	$	—	$	9,600	$	—
Municipal bonds — non-taxable	40,935		40,935		—		40,935		—
Total marketable securities	$	50,535	$	50,535	$	—	$	50,535	$	—

Restricted marketable securities
U.S. treasury bonds	$	7,309	$	7,309	$	—	$	7,309	$	—
U.S. government agency bonds	1,218		1,218		—		1,218		—
International fixed income bonds	652		652		—		652		—
Corporate bonds	6,796		6,796		—		6,796		—
Municipal bonds — taxable	9,130		9,130		—		9,130		—
Total restricted marketable securities	$	25,105	$	25,105	$	—	$	25,105	$	—

Deferred compensation plan
Money Market1	$	1,961	$	1,961	$	—	$	1,961	$	—
Commodities	295		295		295		—		—
Fixed income	4,417		4,417		4,417		—		—
International	4,999		4,999		4,999		—		—
Large cap blend	6,669		6,669		6,669		—		—
Large cap growth	18,524		18,524		18,524		—		—
Large cap value	6,964		6,964		6,964		—		—
Mid cap blend	3,957		3,957		3,957		—		—
Real estate	372		372		372		—		—
Small cap blend	2,980		2,980		2,980		—		—
Deferred compensation plan2	$	51,138	$	51,138	$	49,177	$	1,961	$	—

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Credit Impairment Losses1
December 31, 2024	(in thousands)
Type of security:
Marketable securities
Municipal bonds — taxable	$	10,276	$	—	$	(676)	$	9,600	$	—
Municipal bonds — non-taxable	43,255		—		(2,320)		40,935		—
Total marketable securities	$	53,531	$	—	$	(2,996)	$	50,535	$	—
Restricted marketable securities
U.S. treasury bonds	$	7,276	$	38	$	(5)	$	7,309
U.S. government agency bonds	1,208		10		—		1,218
International fixed income bonds	647		5		—		652
Corporate bonds	6,780		30		(14)		6,796
Municipal bonds — taxable	9,131		40		(41)		9,130
Total restricted marketable securities	$	25,042	$	123	$	(60)	$	25,105	$	—
Total debt securities — available-for-sale	$	78,573	$	123	$	(3,056)	$	75,640	$	—
December 31, 2023
Type of security:
Municipal bonds — non-taxable	$	95,466	$	387	$	(2,722)	$	93,131	$	—
Total debt securities — available-for-sale	$	95,466	$	387	$	(2,722)	$	93,131	$	—

2.The deferred compensation plan carrying amounts and total fair value amounts as of December 31, 2025 and 2024 are inclusive of $2.2 million and $1.5 million, respectively, of holdings expected to be paid to former employees within the next twelve months which were recorded under Prepaid expenses and other assets in the Company’s Consolidated Balance Sheets.

Table of Contents

~~Note~~The 10following —table ~~Share-Based~~shows ~~Compensation~~the amortized cost, unrealized gains and losses, and estimated fair value of the Company’s debt securities as of December 31, 2025 and 2024:

The components of the Company’s share-based compensation expense for the years ended December 31, 2024, 2023 and 2022 are as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Credit Impairment Losses1
December 31, 2025	(in thousands)
Type of security:
Marketable securities




Municipal bonds — taxable	$	4,115	$	1	$	(70)	$	4,046	$	—
Municipal bonds — non-taxable	39,827		124		(1,223)		38,728		—
Total marketable securities	$	43,942	$	125	$	(1,293)	$	42,774	$	—
Restricted marketable securities
U.S. treasury bonds	$	9,904	$	148	$	(15)	$	10,037	$	—
U.S. government agency bonds	1,210		5		—		1,215		—
International fixed income bonds	733		3		—		736		—
Corporate bonds	8,682		177		(1)		8,858		—
Municipal bonds — taxable	9,222		284		—		9,506		—

Total restricted marketable securities	29,751		617		(16)		30,352		—
Total debt securities — available-for-sale	$	73,693	$	742	$	(1,309)	$	73,126	$	—

December 31, 2024
Type of security:
Marketable securities
Municipal bonds — taxable	$	10,276	$	—	$	(676)	$	9,600	$	—
Municipal bonds — non-taxable	43,255		—		(2,320)		40,935		—
Total marketable securities	$	53,531	$	—	$	(2,996)	$	50,535	$	—
Restricted marketable securities

Filing Compare · HEALTHCARE SERVICES GROUP INC