v3.25.2
Segment Information
 6 Months Ended
Jun. 30, 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 six months ended June 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 six months ended June 30, 2025 and 2024:
Three Months Ended June 30, 2025
HousekeepingDietaryTotal
(in thousands, except for percentages)
Revenues$205,743 $252,748 $458,491 
Significant Segment Expenses
Labor and labor-related1
159,524 145,885 305,409 
Food, chemicals and supplies14,214 77,286 91,500 
Bad debt expense24,909 47,384 72,293 
Depreciation and amortization expense1,238 1,583 2,821 
Other segment items2
4,196 6,081 10,277 
Segment profit (loss)$1,662 $(25,471)$(23,809)
Segment margin0.8 %(10.1)%
Unallocated expenses (income)
Corporate expenses3
$17,747 
Gain on deferred compensation plan investments4,649 
Other (income), net(4,735)
Interest expense418 
Income before income taxes$(41,888)
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 June 30, 2024
HousekeepingDietaryTotal
(in thousands, except for percentages)
Revenues$191,006 $235,282 $426,288 
Significant Segment Expenses
Labor and labor-related1
147,560 130,880 278,440 
Food, chemicals and supplies14,244 77,206 91,450 
Bad debt expense10,419 21,302 31,721 
Depreciation and amortization expense940 722 1,662 
Other segment items2
3,061 5,034 8,095 
Segment profit$14,782 $138 $14,920 
Segment margin7.7 %0.1 %
Unallocated expenses (income)
Corporate expenses3
$16,561 
Gain on deferred compensation plan investments1,250 
Other (income), net(2,621)
Interest expense1,716 
Income before income taxes$(1,986)
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.
Six Months Ended June 30, 2025
HousekeepingDietaryTotal
(in thousands, except for percentages)
Revenues$402,081 $504,072 $906,153 
Significant Segment Expenses
Labor and labor-related1
316,500 295,525 612,025 
Food, chemicals and supplies27,777 153,295 181,072 
Bad debt expense25,273 48,108 73,381 
Depreciation and amortization expense2,220 2,308 4,528 
Other segment items2
7,461 11,213 18,674 
Segment profit (loss)$22,850 $(6,377)$16,473 
Segment margin5.7 %(1.3)%
Unallocated expenses (income)
Corporate expenses3
$36,491 
Gain on deferred compensation plan investments3,182 
Other (income), net(6,019)
Interest expense813 
Income before income taxes$(17,994)
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.

Six Months Ended June 30, 2024
HousekeepingDietaryTotal
(in thousands, except for percentages)
Revenues$381,565 $468,156 $849,721 
Significant Segment Expenses
Labor and labor-related1
298,133 263,494 561,627 
Food, chemicals and supplies28,074 150,653 178,727 
Bad debt expense10,705 25,937 36,642 
Depreciation and amortization expense1,810 1,436 3,246 
Other segment items2
6,842 10,235 17,077 
Segment profit$36,001 $16,401 $52,402 
Segment margin9.4 %3.5 %
Unallocated expenses (income)
Corporate expenses3
$32,332 
Gain on deferred compensation plan investments5,350 
Other (income), net(8,320)
Interest expense3,712 
Income before income taxes$19,328 
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 six months ended June 30, 2025 and 2024.

Six Months Ended June 30,
20252024
(in thousands)
Capital expenditures
Housekeeping$2,593 $3,492 
Dietary471 9 
Corporate38 9 
Consolidated$3,102 $3,510