8-K

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)............ February 12, 2008

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):

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

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

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

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

Item 2.02 Results of Operations and Financial Condition.

On February 12, 2008 Healthcare Services Group, Inc. issued a press release (the “Press Release”) announcing its earnings for the three months and year ended December 31, 2007. A copy of the Press Release is being furnished hereto as Exhibit 99.1 and is hereby incorporated by reference to this Current Report.

The information 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

( a )	Not applicable
( b )	Not applicable
( c )	Not applicable
( d )	Exhibits. The following exhibit is being furnished herewith:
		99.1	Press Release and financial tables, dated February 12, 2008.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HEALTHCARE SERVICES GROUP, INC.
February 13, 2008	/S/ Richard W. Hudson
Date	Chief Financial Officer and Secretary

EXHIBIT INDEX

Exhibit:
99.1	Press Release and financial tables dated February 12, 2008 issued by Healthcare Services Group, Inc.

EX-99.1

EXHIBIT 99.1

HEALTHCARE SERVICES GROUP, INC.
REPORTS RESULTS FOR THE THREE MONTHS AND YEAR ENDED
DECEMBER 31, 2007

• Annual net income up 16% over 2006 annual net income on a 13% increase in revenues

• Quarterly cash dividend raised 9% over 2007 third quarter cash dividend and 44% over 2006 fourth quarter cash dividend

Bensalem, PA — February 12, 2008, Healthcare Services Group, Inc. (NASDAQ-HCSG) reported that revenues for the three months ended December 31, 2007 increased 6% to $148,584,000 compared to $139,790,000 for the same 2006 period. Net income for the three months ended December 31, 2007 increased to $7,305,000 or $.17 per basic and diluted common share, compared to 2006 fourth quarter net income of $7,227,000 or $.17 per basic and diluted common share. The 2006 fourth quarter net income results included a $333,000 benefit related to a reduction in our deferred compensation liability.

          The Company also reported that revenues for the year ended December 31, 2007 increased by 13% to $577,721,000 compared to $511,631,000 for the 2006 year. In addition net income for the year increased over 16% to $29,578,000 or $.70 per basic common share and $.67 per diluted common share compared to the year ended December 31, 2006 net income of $25,452,000 or $.62 per basic common share and $.59 per diluted common share.

2008 Earnings Release February 12, 2008

          Additionally, on January 22, 2008, our Board of Directors declared a regular quarterly cash dividend of $.13 per common share, payable on February 15, 2008 to shareholders of record at the close of business February 4, 2008. This dividend represents a 9% increase over the dividend declared for the 2007 third quarter and a 44% increase over the 2006 same period payment. It is the nineteenth consecutive regular quarterly cash dividend payment, as well as the eighteenth consecutive increase since our initiation of regular quarterly cash dividend payments in 2003.

               The Company announced that it will make a presentation on February 13, 2008 regarding the Company at the “UBS Warburg Global Healthcare Services Conference” at the Grand Hyatt in New York City. Additionally, this presentation will be audio webcast at www.ibb.ubs.com.

          Cautionary Statement Regarding Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, are not historical facts but rather based on current expectations, estimates and projections about our business and industry, our beliefs and assumptions. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “goal,” and similar expressions are intended to identify forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by us that any of our plans will be achieved. 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 forward-looking information is also subject to various risks and uncertainties. Such risks and uncertainties include, but are not

2008 Earnings Release February 12, 2008

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 16% of revenues in 2007; risks associated with our acquisition of Summit Services Group, Inc., including integration risks and costs, or such business not achieving expected financial results or synergies or failure to otherwise perform as expected; 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, 2006 Part I thereof under ’’Government Regulation of Clients’’, ''Competition’’ and ''Service Agreements/Collections’’, and under Item IA “Risk Factors”. Many of our clients’ revenues are highly contingent on Medicare and Medicaid reimbursement funding rates, which Congress has affected through the enactment of a number of major laws during the past decade. These laws have significantly altered, or threatened to alter, overall government reimbursement funding rates and mechanisms. The overall effect of these laws and trends in the long-term care industry have affected and could adversely affect the liquidity of our clients, resulting in their inability to make payments to us on agreed upon payment terms. 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 our clients.

2008 Earnings Release February 12, 2008

          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.

          Healthcare Services Group, Inc. is the largest national provider of professional housekeeping, laundry and food services to long-term care and related facilities.

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

HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	For the Year Ended
	December 31,
	2007		2006
Revenues	$	577,721,000	$	511,631,000
Operating costs and expenses:
Cost of services provided		493,364,000		438,617,000
Selling, general and administrative		40,284,000		37,196,000
Other income:
Investment and interest income		4,022,000		4,905,000
Income before income taxes		48,095,000		40,723,000
Income taxes		18,517,000		15,271,000
Net income	$	29,578,000	$	25,452,000
Basic earnings per Common Share	$	.70	$	.62
Diluted earnings per Common Share	$	.67	$	.59
Cash dividends per common share	$	.42	$	.31
Basic weighted average number of common shares outstanding		42,286,000		41,176,000
Diluted weighted average number of common shares outstanding		43,847,000		43,148,000

HEALTHCARE SERVICES GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

	December 31, 2007		December 31, 2006
Cash and cash equivalents	$	92,461,000	$	72,997,000
Accounts receivable, net		82,951,000		78,086,000
Other current assets		19,686,000		17,154,000
Total current assets		195,098,000		168,237,000
Property and equipment, net		4,303,000		4,875,000
Notes receivable- long term, net		6,058,000		7,861,000
Goodwill , net		15,020,000		14,543,000
Other Intangible Assets, net		6,090,000		7,148,000
Deferred compensation funding		10,361,000		7,385,000
Other assets		6,438,000		5,507,000
Total Assets	$	243,368,000	$	215,556,000
Accrued insurance claims- current	$	4,302,000	$	4,647,000
Other current liabilities		23,579,000		22,963,000
Total current liabilities		27,881,000		27,610,000
Accrued insurance claims- long term		10,037,000		10,843,000
Deferred compensation liability		10,732,000		11,626,000
Stockholders’ equity		194,718,000		165,477,000
Total Liabilities and Stockholders’ Equity	$	243,368,000	$	215,556,000

HEALTHCARE SERVICES GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	For the Three Months Ended
	December 31,
	2007		2006
Revenues	$	148,584,000	$	139,790,000
Operating costs and expenses:
Cost of services provided		127,490,000		118,398,000
Selling, general and administrative		9,802,000		10,885,000
Other income:
Investment and interest income		586,000		1,288,000
Income before income taxes		11,878,000		11,795,000
Income taxes		4,573,000		4,568,000
Net income	$	7,305,000	$	7,227,000
Basic earnings per common share	$	.17	$	.17
Diluted earnings per common share	$	.17	$	.17
Cash dividends per common share	$	.12	$	.09
Basic weighted average number of common shares outstanding		42,737,000		41,411,000
Diluted weighted average number of common shares outstanding		44,033,000		43,479,000