Segment Information

9 Months Ended

Sep. 30, 2025

Segment Reporting [Abstract]

Segment Information

Note 13—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 nine months ended September 30, 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 and nine months ended September 30, 2025 and 2024:

	Three Months Ended September 30, 2025
	Housekeeping			Dietary			Total
	(in thousands, except for percentages)
Revenues	$	211,788		$	252,550		$	464,338
Significant Segment Expenses
Labor and labor-related1	166,198			150,490			316,688
Food, chemicals and supplies	15,803			79,028			94,831
Bad debt expense	1,954			3,677			5,631
Depreciation and amortization expense	1,142			703			1,845
Other segment items2	3,932			5,733			9,665
Segment profit	$	22,759		$	12,919		$	35,678
Segment margin	10.7		%	5.1		%
Unallocated expenses (income)
ERC refunds3							$	(34,239)
Corporate expenses4							20,336
Gain on deferred compensation plan investments							3,717
Other (income), net							(11,837)
Interest expense							393
Income before income taxes							$	57,308

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.ERC refunds were excluded from segment results for each segment as the credits were related to services provided in previous years and not indicative of current period segment performance, as reviewed by the CODM.

4.Represents selling, general and administrative expense less the amounts allocated to segments for labor and benefits.

	Three Months Ended September 30, 2024
	Housekeeping			Dietary			Total
	(in thousands, except for percentages)
Revenues	$	191,101		$	237,048		$	428,149
Significant Segment Expenses
Labor and labor-related1	152,969			135,463			288,432
Food, chemicals and supplies	14,516			77,695			92,211
Bad debt expense	41			165			206
Depreciation and amortization expense	937			646			1,583
Other segment items2	3,517			5,380			8,897
Segment profit	$	19,121		$	17,699		$	36,820
Segment margin	10.0		%	7.5		%
Unallocated expenses (income)
Corporate expenses3							$	17,870
Gain on deferred compensation plan investments							2,419
Other (income), net							(3,825)
Interest expense							1,548
Income before income taxes							$	18,808

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.

	Nine Months Ended September 30, 2025
	Housekeeping			Dietary			Total
	(in thousands, except for percentages)
Revenues	$	613,869		$	756,622		$	1,370,491
Significant Segment Expenses
Labor and labor-related1	482,698			446,015			928,713
Food, chemicals and supplies	43,580			232,323			275,903
Bad debt expense	27,227			51,785			79,012
Depreciation and amortization expense	3,362			3,011			6,373
Other segment items2	11,393			16,946			28,339
Segment profit	$	45,609		$	6,542		$	52,151
Segment margin	7.4		%	0.9		%
Unallocated expenses (income)
ERC refunds3							$	(34,239)
Corporate expenses4							56,827
Gain on deferred compensation plan investments							6,899
Other (income), net							(17,856)
Interest expense							1,206
Income before income taxes							$	39,314

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.ERC refunds were excluded from segment results for each segment as the credits were related to services provided in previous years and not indicative of current period segment performance, as reviewed by the CODM.

4.Represents selling, general and administrative expense less the amounts allocated to segments for labor and benefits.

	Nine Months Ended September 30, 2024
	Housekeeping			Dietary			Total
	(in thousands, except for percentages)
Revenues	$	572,666		$	705,204		$	1,277,870
Significant Segment Expenses
Labor and labor-related1	451,102			398,957			850,059
Food, chemicals and supplies	42,590			228,348			270,938
Bad debt expense	10,746			26,102			36,848
Depreciation and amortization expense	2,747			2,082			4,829
Other segment items2	10,359			15,615			25,974
Segment profit	$	55,122		$	34,100		$	89,222
Segment margin	9.6		%	4.8		%
Unallocated expenses (income)
Corporate expenses3							$	50,202
Gain on deferred compensation plan investments							7,769
Other (income), net							(12,145)
Interest expense							5,260
Income before income taxes							$	38,136

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 nine months ended September 30, 2025 and 2024.

	Nine Months Ended September 30,
	2025		2024
	(in thousands)
Capital expenditures
Housekeeping	$	3,678	$	3,927
Dietary	643		721
Corporate	117		261
Consolidated	$	4,438	$	4,909