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) July 14, 2009

HEALTHCARE SERVICES GROUP, INC.

( Exact name of registrant as specified in its charter)

Pennsylvania	0-120152	23-2018365
(State or other jurisdiction of Incorporation or organization)	(Commission File Number)	(IRS Employer 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 July 14, 2009 Healthcare Services Group, Inc. issued a press release (the “Press Release”) announcing its earnings for the three and six month periods ended June 30, 2009. 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 3.03 Material Modification to Rights of Security Holders.

On July 14, 2009, the Board of Directors adopted an amendment to the Company’s Amended and Restated By-laws. The amendment provides for advance notice provisions for shareholder nominees for election to the Company’s Board of Directors as well as for shareholder proposals. The amendment provides, among other things, that in general any stockholder entitled to vote in the election of directors may nominate one or more persons for election as directors at a meeting only if it provides the Company written notice of such nomination not less than 90 days or more than 120 days prior to the meeting. The following summary of the amendment to the Amended and Restated By-laws does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of the Amendment to the Company’s Amended and Restated By-laws filed as exhibit 99.2 to this Form 8-K.

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 July 14, 2009.
99.2	Amendment to By-laws

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.
July 15, 2009	/S/ Richard W. Hudson
Date	Chief Financial Officer and Secretary

EXHIBIT INDEX

Exhibit:
99.1	Press Release and financial tables dated July 14, 2009 issued by Healthcare Services Group, Inc.
99.2	Amendment to By-laws

EX-99.1

Exhibit 99.1

HEALTHCARE SERVICES GROUP, INC. REPORTS
RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2009
AND DECLARES INCREASED SECOND QUARTER 2009 CASH DIVIDEND

Bensalem, PA — July 14, 2009, Healthcare Services Group, Inc. (NASDAQ-HCSG) reported that revenues for the three months ended June 30, 2009 increased 16% to $170,896,000 compared to $147,918,000 for the same 2008 period. Net income for the three months ended June 30, 2009 increased over 12% to $7,815,000 or $.18 per basic and per diluted common share, compared to the 2008 second quarter net income of $6,953,000 or $.16 per basic and per diluted common share.

     Revenues for the six months ended June 30, 2009 increased over 12% to $331,305,000 compared to $295,177,000 for the same 2008 period. Net income for the six months ended June 30, 2009 increased 13% to $15,551,000 or $.36 per basic and $.35 per diluted common share compared to the 2008 six month period net income of $13,810,000 or $.32 per basic and $.31 per diluted common share.

     The Board of Directors has declared a second quarter 2009 regular quarterly cash dividend of $.19 per common share, payable on August 7, 2009 to shareholders of record at the close of business July 24, 2009. This represents a 6% increase over the dividend declared for the 2009 first quarter and a 27% increase over the 2008 same period payment. It is the 25th consecutive regular quarterly cash dividend payment, as well as the 24th consecutive increase since our initiation of regular quarterly cash dividend payments in 2003.

     The Company will host a conference call on July 15, 2009 at 8:30 AM Eastern Time to discuss its results for the three and six month periods ended June 30, 2009. The call in numbers are 866-293-8970 and 913-312-0720 (passcode #1036466).

2^nd Quarter 2009 Earnings Release
Page 2 July 14, 2009

Cautionary Statement Regarding Forward-Looking Statements

This release and any schedules incorporated by reference into this report contain 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 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 13% of revenues in the six month period ended June 30, 2009; risks associated with our acquisition of Contract Environmental Services, 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, our workforce and services provided, 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, 2008 in Part I

2^nd Quarter 2009 Earnings Release
Page 3 July 14, 2009

under “Government Regulation of Clients”, “Competition”, “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.

     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
215-639-4274	215-639-4274

CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	For the Three Months Ended
	June 30,
	2009		2008
Revenues	$	170,896,000	$	147,918,000
Operating costs and expenses:
Cost of services provided		145,830,000		127,074,000
Selling, general and administrative		13,516,000		10,124,000
Income from operations		11,550,000		10,720,000
Other income:
Investment and interest income		1,157,000		585,000
Income before income taxes		12,707,000		11,305,000
Income taxes		4,892,000		4,352,000
Net income	$	7,815,000	$	6,953,000
Basic earnings per common share	$	.18	$	.16
Diluted earnings per common share	$	.18	$	.16
Cash dividends per common share	$	.18	$	.14
Basic weighted average number of common shares outstanding		43,537,000		43,080,000
Diluted weighted average number of common shares outstanding		44,262,000		43,962,000

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

	For the Six Months Ended
	June 30,
	2009		2008
Revenues	$	331,305,000	$	295,177,000
Operating costs and expenses:
Cost of services provided		283,722,000		252,928,000
Selling, general and administrative		24,392,000		20,703,000
Income from operations		23,191,000		21,546,000
Other income:
Investment and interest income		2,094,000		909,000
Income before income taxes		25,285,000		22,455,000
Income taxes		9,734,000		8,645,000
Net income	$	15,551,000	$	13,810,000
Basic earnings per common share	$	.36	$	.32
Diluted earnings per common share	$	.35	$	.31
Cash dividends per common share	$	.35	$	.27
Basic weighted average number of common shares outstanding		43,497,000		43,048,000
Diluted weighted average number of common shares outstanding		44,168,000		44,088,000

HEALTHCARE SERVICES GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

	June 30, 2009		December 31, 2008
Cash and cash equivalents	$	24,539,000	$	37,501,000
Marketable securities, net		52,651,000		49,414,000
Accounts receivable, net		105,689,000		96,558,000
Other current assets		22,552,000		23,142,000
Total current assets		205,431,000		206,615,000
Property and equipment, net		4,111,000		3,929,000
Notes receivable- long term, net		6,466,000		3,201,000
Goodwill , net		17,054,000		15,020,000
Other Intangible Assets, net		9,776,000		5,033,000
Deferred compensation funding		9,157,000		8,287,000
Other assets		7,117,000		6,476,000
Total Assets	$	259,112,000	$	248,561,000
Accrued insurance claims- current	$	4,385,000	$	3,943,000
Other current liabilities		26,475,000		25,099,000
Total current liabilities		30,860,000		29,042,000
Accrued insurance claims- long term		10,233,000		9,201,000
Deferred compensation liability		9,319,000		8,636,000
Stockholders’ equity		208,700,000		201,682,000
Total Liabilities and Stockholders’ Equity	$	259,112,000	$	248,561,000

EX-99.2

Exhibit 99.2

AMENDMENT TO THE
AMENDED AND RESTATED
BY-LAWS
of
HEALTHCARE SERVICES GROUP, INC.
(a Pennsylvania Corporation)

Dated July 14, 2009

The By-laws of Healthcare Services Group, Inc. (the “Corporation”) are amended as follows, said amendment having been approved by a majority of the directors at a meeting held on July 14, 2009:

1.

A new Section 11 has been added to Article III to read in its entirety as follows:

Subject to the rights of holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, nominations for the election of directors may be made by the board of directors or a proxy committee appointed by the board of directors or by any stockholder of record entitled to vote in the election of directors. However, any stockholder of record entitled to vote in the election of directors may nominate directors only if written notice of such stockholder’s intent to make such nomination or nominations has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation at the principal office of the Corporation (i) with respect to an election to be held at an annual meeting of stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder must be so delivered not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made, and (ii) with respect to an election to be held at

	a special meeting of stockholders called for the purpose of electing directors, the close of business on the seventh day following the date on which public announcement of the date of such meeting is first made. Each such notice shall set forth (a) the name and address of the stockholder who intends to make the nomination, of the beneficial owner, if any, on whose behalf the nomination is made and of the person or persons to be nominated; (b) the class and number of shares of stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner; (c) a representation that the stockholder is a holder of record of stock of the Corporation and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (d) a description of all arrangements or understandings between the stockholder and each nominee and any other person or person (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (e) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, had the nominee been nominated or intended to be nominated, by the board of directors; and (f) the written consent of each nominee to serve as a director of the Corporation if so elected. The chairperson of the meeting may refuse to acknowledge the nomination of any person not made in compliance with the foregoing procedure.
2.	A new Section 12 has been added to Article III to read in its entirety as follows:
	Any stockholder of record entitled to vote in the election of directors may submit proposals for business to be considered by the stockholders of the Corporation at any annual meeting of stockholders if written notice of such stockholder’s intent to submit such proposal or proposals has been given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Corporation at the principal office of the Corporation not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder must be so delivered not earlier than the 120th day prior to such annual meeting

and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such annual meeting is first made. Each such notice shall set forth (a) the name and address of the stockholder who intends to introduce the proposal and of the beneficial owner, if any, on whose behalf the proposal is to be introduced; (b) the text of the proposal to be introduced (including the text of any resolutions proposed for consideration and in the event such proposal is to amend these Bylaws, the text of the proposed amendment), the reasons for introducing the proposal at the annual meeting and any material interest of the stockholder in the proposal; (c) the class and number of shares of stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner; and (d) a representation that the stockholder is a holder of record of stock of the Corporation and intends to appear in person or by proxy at the annual meeting to introduce the proposal or proposals specified in the notice. The chairperson of the annual meeting may refuse to acknowledge the introduction of any stockholder proposal not made in compliance with the foregoing procedure.

     The amendments contained herein shall become effective on July 14, 2009. Except as herein amended, the terms and provisions of the Amended and Restated By-laws of the Corporation will remain unmodified and in full force and effect.

	Healthcare Services Group, Inc.
Dated July 14, 2009	By:	/s/ Richard W. Hudson
		Richard W. Hudson
		Chief Financial Officer and Secretary