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Segment Information | 3 Months Ended
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Mar. 31, 2025
Segment Reporting [Abstract] |
Segment Information | Note 12—Segment Information The Company manages and evaluates its operations in two reportable segments: Housekeeping (housekeeping, laundry, linen and other services) and Dietary (dietary department services). Although both segments serve a similar customer base and share many operational similarities, they are managed separately due to distinct differences in the type of services provided, as well as the specialized expertise required of the professional management personnel responsible for delivering each segment’s services. Such services are rendered pursuant to discrete contracts, specific to each reportable segment. In 2024, the Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 created certain additional disclosure requirements, including, among other requirements, a disclosure of the Company’s Significant Segment Expenses (“SSEs”) regularly provided to the Company’s Chief Operating Decision Maker (“CODM”) included within each reported measure of segment profit or loss, a required disclosure for other segment items and a narrative description of such items, a disclosure of the title and the position of the CODM and a narrative disclosure describing how the CODM uses the reported segment profit or loss measures to assess segment performance and allocate resources. The CODM for both segments for each of the three months ended March 31, 2025 and 2024 was Theodore Wahl, the Company’s President and Chief Executive Officer. As part of the adoption of ASU 2023-07, management reviewed the information provided to the CODM and updated the presentation of such information, including SSEs, to better align with the requirements of ASU 2023-07. Certain prior period segment information has been recast in order to conform with current-period presentation requirements, including the allocation methodology of bad debt expense, labor and labor-related costs and certain other segment items to segments. Additionally, the Company’s CODM does not review assets by segment to assess segment performance or allocate resources, nor is such information provided to the CODM. Accordingly, the Company does not present assets by segment. The Company’s SSEs for each segment include direct labor costs and segment-based management expenses (collectively, “labor and labor-related”), food, chemicals and supplies, bad debt expense, and depreciation & amortization, as these are specific costs regularly provided to the CODM and used to evaluate segment performance. Other segment items include expenses recorded within costs of services provided which are not regularly provided to the CODM. The CODM evaluates segment profit each period against historical results, factoring in macroeconomic factors such as the cost of labor and supplies, to assess segment performance. The Company’s accounting policies for the segments are generally the same as described in the Company’s significant accounting policies. The Company does not allocate Corporate expenses, gains (losses) on deferred compensation plan investments, other (income) expense, net, interest expense and income tax provision to segments; such amounts are added to combined segment profit and reconciled to the Company’s consolidated income before income taxes. All revenues and net income are earned in the United States. The following tables provide profit information disaggregated by the Company’s reportable segments for each of the three months ended March 31, 2025 and 2024:
|  | Three Months Ended March 31, 2025
|  | Housekeeping |  | Dietary |  | Total
|  | (in thousands, except for percentages)
Revenues |  | $ | 196,338 |  |  | $ | 251,324 |  |  | $ | 447,662 |
Significant Segment Expenses |  |  |  |  |  |
Labor and labor-related 1 |  | 156,976 |  |  | 149,640 |  |  | 306,616 |
Food, chemicals and supplies |  | 13,563 |  |  | 76,009 |  |  | 89,572 |
Bad debt expense |  | 364 |  |  | 724 |  |  | 1,088 |
Depreciation and amortization expense |  | 982 |  |  | 725 |  |  | 1,707 |
Other segment items 2 |  | 3,265 |  |  | 5,133 |  |  | 8,398 |
Segment profit |  | $ | 21,188 |  |  | $ | 19,093 |  |  | $ | 40,281 |
Segment margin |  | 10.8 | % |  | 7.6 | % |  |
Unallocated expenses (income) |  |  |  |  |  |
Corporate expenses 3 |  |  |  |  |  | $ | 18,743 |
Loss on deferred compensation plan investments |  |  |  |  |  | (1,467) |
Other (income), net |  |  |  |  |  | (1,284) |
Interest expense |  |  |  |  |  | 395 |
Income before income taxes |  |  |  |  |  | $ | 23,894 |
1. Includes direct labor costs, field management costs (including certain costs included in selling, general and administrative expense), employer taxes, workers' compensation and general liability insurance. 2. Includes expenses for technology, employment advertising, travel & entertainment, professional services and various other less significant expense items. 3. Represents selling, general and administrative expense less the amounts allocated to segments for labor and benefits.
|  | Three Months Ended March 31, 2024
|  | Housekeeping |  | Dietary |  | Total
|  | (in thousands, except for percentages)
Revenues |  | $ | 190,559 |  |  | $ | 232,874 |  |  | $ | 423,433 |
Significant Segment Expenses |  |  |  |  |  |
Labor and labor-related 1 |  | 150,573 |  |  | 132,614 |  |  | 283,187 |
Food, chemicals and supplies |  | 13,830 |  |  | 73,447 |  |  | 87,277 |
Bad debt expense |  | 286 |  |  | 4,635 |  |  | 4,921 |
Depreciation and amortization expense |  | 870 |  |  | 714 |  |  | 1,584 |
Other segment items 2 |  | 3,781 |  |  | 5,201 |  |  | 8,982 |
Segment profit |  | $ | 21,219 |  |  | $ | 16,263 |  |  | $ | 37,482 |
Segment margin |  | 11.1 | % |  | 7.0 | % |  |
Unallocated expenses (income) |  |  |  |  |  |
Corporate expenses 3 |  |  |  |  |  | $ | 15,771 |
Gain on deferred compensation plan investments |  |  |  |  |  | 4,100 |
Other (income), net |  |  |  |  |  | (5,699) |
Interest expense |  |  |  |  |  | 1,996 |
Income before income taxes |  |  |  |  |  | $ | 21,314 |
1. Includes direct labor costs, field management costs (including certain costs included in selling, general and administrative expense), employer taxes, workers' compensation and general liability insurance. 2. Includes expenses for technology, employment advertising, travel & entertainment, professional services and various other less significant expense items. 3. Represents selling, general and administrative expense less the amounts allocated to segments for labor and benefits. The following table provides capital expenditures disaggregated by the Company’s reportable segments for each of the quarters ended March 31, 2025 and 2024.
|  | Three Months Ended March 31,
|  | 2025 |  | 2024
|  | (in thousands)
Capital expenditures |  |  |  |
Housekeeping |  | $ | 1,448 |  |  | $ | 1,823 |
Dietary |  | 324 |  |  | 333 |
Corporate overhead |  | 9 |  |  | 41 |
Consolidated |  | $ | 1,781 |  |  | $ | 2,197 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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