Healthcare Services Group Slides on Genesis Bankruptcy

Shares of Healthcare Services Group HCSG took an 8% hit after Genesis HealthCare filed for Chapter 11. HCSG still supports 164 Genesis facilities and expects no interruption to food, environmental or laundry services, even as roughly sixty-four million dollars in receivables sits in limbo.

The bankruptcy will trigger a noncash hit of around sixty-two cents per share in Q2 and a small charge next quarter. CEO Ted Wahl says the news stings but won't derail the company's midsingle-digit revenue growth goal or its plan to generate sixty to seventy-five million dollars of operating cash flow this year.

All eyes are on HCSG's Q2 report on July 23. Investors will want to see how quickly the company weathers this setback, replaces lost volume and keeps its growth story intact.