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<SEC-DOCUMENT>0000950116-06-001246.txt : 20060419
<SEC-HEADER>0000950116-06-001246.hdr.sgml : 20060419
<ACCEPTANCE-DATETIME>20060419123431
ACCESSION NUMBER:		0000950116-06-001246
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20060418
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20060419
DATE AS OF CHANGE:		20060419

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HEALTHCARE SERVICES GROUP INC
		CENTRAL INDEX KEY:			0000731012
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-TO DWELLINGS & OTHER BUILDINGS [7340]
		IRS NUMBER:				232018365
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12015
		FILM NUMBER:		06766525

	BUSINESS ADDRESS:	
		STREET 1:		2643 HUNTINGDON PIKE
		CITY:			HUNTINGDON VALLEY
		STATE:			PA
		ZIP:			19006
		BUSINESS PHONE:		2159381661

	MAIL ADDRESS:	
		STREET 1:		2643 HUNTINGDON PIKEE
		CITY:			HUNTINGDON VALLEY
		STATE:			PA
		ZIP:			19006
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>eight-k.txt
<DESCRIPTION>8-K
<TEXT>
<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


Date of Report (Date of earliest event reported)............April 18, 2006


                         HEALTHCARE SERVICES GROUP, INC.
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

         Pennsylvania                    0-120152                 23-2018365
- --------------------------------        -----------            ---------------
(State or other jurisdiction of         (Commission             (IRS Employer
  Incorporation or organization)        File Number)            Identification
                                                                    number)

           3220 Tillman Drive-Suite 300, Bensalem, Pennsylvania 19020
           ----------------------------------------------------------
               (Address of principal executive offices)    (Zip code)

Registrant's telephone number, including area code: 215-639-4274
                                                    -------------


                                 Not Applicable
          ------------------------------------------------------------
          (Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions ( see General Instruction A.2. below):

         (  )     Written communications pursuant to Rule 425 under the
                  Securities Act (17 CFR 230.425)

         (  )     Soliciting material pursuant to Rule 14a-12 under the
                  Exchange Act (17 CFR 240.14a-12)

         (  )     Pre-commencement communications pursuant to Rule 14d-2(b)
                  under the Exchange Act (17 CFR 240.14d-2(b))

         (  )     Pre-commencement communications pursuant to Rule 13e-4(c)
                  under the Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

Item 2.02 Results of Operations and Financial Condition.

On April 18, 2006 Healthcare Services Group, Inc. issued a press release
announcing its earnings for the three month period ended March 31, 2006. A copy
of the press release is attached hereto as Exhibit 99.1 and is hereby
incorporated by reference.

The information in contained herein shall not be deemed "filed" for the purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section, nor shall it be
deemed incorporated by reference in any filing under the Securities Act of 1933,
as amended or the Exchange Act.

Item 9.01 Financial Statements and Exhibits

          (c)    Exhibits

          99.1   Press Release, dated April 18, 2006


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                               HEALTHCARE SERVICES GROUP, INC.


April 18, 2006                                 /S/ Richard W. Hudson
- --------------                                 -------------------------------
Date                                           Vice President-Finance and
                                                      Secretary

<PAGE>

                                  EXHIBIT INDEX

Exhibit:

99.1              Press Release and financial tables dated April 18, 2006 issued
                  by Healthcare Services Group, Inc.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>ex99-1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
<PAGE>

                        HEALTHCARE SERVICES GROUP, INC.
                   REPORTS RESULTS FOR THE THREE MONTHS ENDED
          MARCH 31, 2006 AND DECLARES FIRST QUARTER 2006 CASH DIVIDEND

         o  NET INCOME UP 36% ON AN 4% INCREASE IN REVENUES

         o  QUARTERLY CASH DIVIDEND RAISED 10% OVER 2005 FOURTH QUARTER CASH
            DIVIDEND AND 57% OVER 2005 FIRST QUARTER CASH DIVIDEND

Bensalem, PA - April 18, 2006, Healthcare Services Group, Inc. (NASDAQ-HCSG)
reported that revenues for the three months ended March 31, 2006 increased by 4
% to $118,918,000 compared to $114,695,000 for the same 2005 period. Net income
increased 36% for the three months ended March 31, 2006 to $5,791,000 or $.21
per basic and $.20 per diluted common share, compared to the 2005 first quarter
net income of $4,263,000 or $.16 per basic and $.15 per diluted common share.

         Additionally, the Company's Board of Directors has declared a first
quarter 2006 cash dividend of $.11 per common share payable on May 10, 2006 to
shareholders of record at the close of business April 28, 2006. The first
quarter 2006 cash dividend represents a 10% increase over the cash dividend
declared for the 2005 fourth quarter and is the twelfth consecutive regular
quarterly cash dividend payment, as well as the eleventh consecutive increase
since our initiation of regular quarterly cash dividend payments in 2003.


<PAGE>


1st Quarter Earnings Release                                             Page 2
April 18, 2006


CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS
This report includes forward-looking statements that are subject to risks and
uncertainties that could cause actual results or objectives to differ materially
from those projected. 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 risks and uncertainties include, but are not limited
to, risks arising from our providing services exclusively to the health care
industry, primarily providers of long-term care; credit and collection risks
associated with this industry; one client accounting for approximately 19% of
revenues in the three month period ended March 31, 2006 (the client has
completed its previously announced merger on March 14, 2006); our claims
experience related to workers' compensation and general liability insurance; the
effects of changes in, or interpretations of laws and regulations governing the
industry, including state and local regulations pertaining to the taxability of
our services; and the risk factors described in our Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 2005 in Part
I thereof under "Government Regulation of Clients", "Competition", "Service
Agreements/Collections" and "Risk Factors". Many of our clients' revenues are
highly contingent on Medicare and Medicaid reimbursement funding rates, which
have been and continue to be adversely affected by the change in Medicare
payments under the 1997 enactment of Medicare Prospective Payment System. That
change, and the lack of substantive reimbursement funding rate reform
legislation, as well as other trends in the long-term care industry have
resulted in certain of our clients filing for bankruptcy protection. Others may
follow. Any decisions by the government to discontinue or adversely modify


<PAGE>


Earnings Release                                                April 18, 2006
Page 3

legislation related to reimbursement funding rates will have a material adverse
affect on our clients. These factors, in addition to delays in payments from
clients, have resulted in and could continue to result in significant additional
bad debts in the near future. Additionally, our operating results would be
adversely affected if unexpected increases in the costs of labor and labor
related costs, materials, supplies and equipment used in performing services
could not be passed on to clients.

         In addition, we believe that to improve our financial performance we
must continue to obtain service agreements with new clients, provide new
services to existing clients, achieve modest price increases on current service
agreements with existing clients and 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 successfully executing projected growth
strategies.

Company  Contacts:
Daniel P. McCartney                        Thomas Cook
Chairman and Chief Executive Officer       President and Chief Operating Officer
215-639-4274                               215-639-4274
<PAGE>

                         HEALTHCARE SERVICES GROUP, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                       March 31, 2006           December 31, 2005
                                                      ---------------           -----------------
<S>                                                   <C>                       <C>
Cash and cash equivalents                             $    97,396,000           $    91,005,000
Accounts receivable, net                                   62,777,000                59,197,000
Other current assets                                       16,383,000                15,414,000
                                                      ---------------           ---------------
  Total current assets                                    176,556,000               165,616,000

Property and equipment, net                                 4,726,000                 4,744,000
Notes receivable- long term, net                            4,329,000                 4,555,000
Deferred compensation funding                               6,151,000                 5,626,000
Other assets                                                8,071,000                 7,889,000
                                                      ---------------           ---------------

Total Assets                                          $   199,833,000           $   188,430,000
                                                      ===============           ===============




Accrued insurance claims- current                     $     4,445,000           $     4,405,000
Other current liabilities                                  24,290,000                18,676,000
                                                      ---------------           ---------------
  Total current liabilities                                28,735,000                23,081,000

Accrued insurance claims- long term                        10,372,000                10,277,000
Deferred compensation liability                             7,693,000                 6,909,000
Stockholders' equity                                      153,033,000               148,163,000
                                                      ---------------           ---------------

Total Liabilities and Stockholders' Equity            $   199,833,000           $   188,430,000
                                                      ===============           ===============
</TABLE>


<PAGE>
                         HEALTHCARE SERVICES GROUP, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                              For the Three Months Ended
                                                                       March 31,
                                                               2006                2005
                                                           --------------      -------------

<S>                                                        <C>                 <C>
Revenues                                                   $ 118,918,000       $ 114,695,000
Operating costs and expenses:
   Cost of services provided                                 102,182,000          99,770,000
   Selling, general and administrative                         8,891,000           8,429,000
Other income:
    Investment and interest                                    1,347,000             380,000
                                                           -------------       -------------
Income before income taxes                                     9,192,000           6,876,000
Income taxes                                                   3,401,000           2,613,000
                                                           -------------       -------------
Net income                                                 $   5,791,000       $   4,263,000
                                                           =============       =============

Basic earnings per common share                            $         .21       $         .16
                                                           =============       =============

Diluted earnings per common share                          $         .20       $         .15
                                                           =============       =============

Cash dividends per common share                            $         .10       $         .06
                                                           =============       =============

Basic weighted average number of
     common shares outstanding                                27,320,000          26,622,000
                                                           =============       =============

Diluted weighted average number of
     common shares outstanding                                28,620,000          28,036,000
                                                           =============       =============

</TABLE>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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