-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N1/9By6LNyzvDtcpgGMtR0jIJ/HGcyxtTZcO0zr/9okAuMgCw8Nx9lESL0rIYalU VWyJnuDlezoebVmOWkVSbg== 0001125282-06-003697.txt : 20060627 0001125282-06-003697.hdr.sgml : 20060627 20060626181754 ACCESSION NUMBER: 0001125282-06-003697 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060627 DATE AS OF CHANGE: 20060626 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: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12015 FILM NUMBER: 06925445 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 11-K 1 p413812-11k.txt FORM 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2005 Commission File Number 0-120152 HEALTHCARE SERVICES GROUP, INC. (Exact name of registrant as specified in its charter) Pennsylvania 23-2018365 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification number) 3220 Tillman Drive-Suite 300, Bensalem, Pennsylvania 19020 (Address of principal executive office) (Zip code) Registrant's telephone number, including area code: 215-639-4274 Total of 16 Pages INDEX DESCRIPTION PAGE - ----------- ----- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 2 FINANCIAL STATEMENTS: STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 3 STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 4 NOTES TO FINANCIAL STATEMENTS 5 - 9 SUPPLEMENTAL SCHEDULE: SCHEDULE OF ASSETS (HELD AT END OF YEAR) 10 SIGNATURES 11 CERTIFICATIONS 12-15 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Plan Administrator: HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN We have audited the accompanying statements of net assets available for benefits of Healthcare Services Group, Inc. Retirement Savings Plan (the "Plan") as of December 31, 2005 and 2004, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2005 and 2004, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at the end of year) as of December 31, 2005 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule has been subjected to the auditing procedures applied in our audit of the basic 2005 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. GRANT THORNTON LLP Edison, New Jersey June 23, 2006 -2- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2005 2004 ---------- ---------- Assets Investments at fair value $1,551,867 $1,338,767 Non-interest bearing cash -- 9 Receivables Participant contributions 7,401 7,695 ---------- ---------- Net Assets Available for Benefits $1,559,268 $1,346,471 ========== ========== The accompanying notes are an integral part of these statements. -3- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2005 2004 ---------- ---------- Additions: Participant contributions $ 222,229 $ 278,988 Rollover contributions -- 27,169 Investment income: Interest 56 11 Dividends 39,924 14,197 Other (163) -- Net appreciation in fair value of investments 96,536 85,561 ---------- ---------- 136,353 99,769 ---------- ---------- Total Additions 358,581 405,926 Deductions: Benefit payments (145,785) (90,737) NET INCREASE 212,797 315,189 Net assets available for benefits, beginning of year 1,346,471 1,031,282 ---------- ---------- Net assets available for benefits, end of year $1,559,268 $1,346,471 ========== ========== The accompanying notes are an integral part of these statements. -4- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2005 AND 2004 NOTE A.-DESCRIPTION OF PLAN The following description of the Healthcare Services Group, Inc. Retirement Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. 1. General The Plan commenced October 1, 1999 and is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The Plan is a defined contribution plan covering all non-highly compensated salaried employees who have one year of service (1,000 hours) and have attained the age of twenty-one or older with the exception employees whose employment is governed by a collective bargaining agreement. 2. Contributions Each year, participants may contribute up to 15% of their pretax annual compensation as defined in the Plan. There are no employer-matching contributions as defined in the Plan. A participant may elect to commence salary reductions as of the first day of the month coinciding with the date the employee satisfied the eligibility requirements. Participants may also rollover to the plan amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants direct the investment of their contributions into various options offered by the Plan. Contributions are subject to certain limitations. 3. Participant Accounts Each participant's account is credited with the participant's contribution and allocations of Plan earnings. Allocations are determined by the participant. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. 4. Vesting Participants are vested immediately in their contributions plus actual earnings thereon. -5- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 NOTE A. (CONTINUED) 5. Administrative Expenses All administrative expenses were paid by the plan sponsor, Healthcare Services Group, Inc. 6. Benefit Payments On termination of service due to death or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account or monthly, quarterly, semi-monthly or annual installments. No disability benefits, other than those payable upon termination of employment, are provided in the Plan. For termination of service for other reasons, a participant may receive the value of the vested interest in his or her account as a lump sum distribution. A Participant who has attained the age of 59 1/2 years may elect to receive a distribution of all or a portion of the vested amounts then credited to the Participant's account. The Participant will still continue to be eligible to participate in the Plan. A Participant may elect to receive an advance distribution for hardship under certain conditions as defined in the Plan and as subject to the evaluation of the Plan Administrator based on whether certain conditions have been satisfied. NOTE B.-SUMMARY OF ACCOUNTING POLICIES A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows: 1. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and changes therein, and disclosures of contingent assets and liabilities. Actual results could differ from those estimates. -6- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 NOTE B. (CONTINUED) 2. Investment Valuation and Income Recognition The Plan's investments are stated at fair value, which approximates market value, as reported to the Plan by PNC Bank. Quoted market prices are used to value investments. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year-end. Purchases and sales of securities are recorded on a trade-date basis. 3. Benefit Payments Participants' withdrawals are recorded when paid. NOTE C.-INVESTMENTS The following presents investments that represent 5 percent or more of the Plan's net assets as of: December 31, --------------------- 2005 2004 ---------- -------- Fidelity Advisor Equity Growth Fund $ * $ 70,646 Fidelity Advisor Equity Income Fund 137,023 103,712 Growth Fund of America 119,469 * Janus Adviser Forty Fund 138,841 98,315 Janus Adviser Lg Cap Growth Fund 83,452 88,090 Healthcare Services Group, Inc. common stock 133,574 129,183 Black Rock Money Market Fund (PNC; Note E) 475,145 437,510 ---------- -------- $1,087,504 $927,456 ========== ======== * Balance did not represent at least 5% of Net Plan Assets During 2005 and 2004, the Plan's investments (including realized and unrealized gains and losses) appreciated in value by $96,536 and $85,561, respectively as follows: -7- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 NOTE C. (CONTINUED) December 31, ----------------- 2005 2004 ------- ------- Mutual Funds $21,843 $51,538 Healthcare Services Group, Inc. common stock 63,328 31,073 Money Market Fund (PNC; Note E) 11,365 2,950 ------- ------- $96,536 $85,561 ======= ======= NOTE D.-PLAN TERMINATION Although it has not expressed intent to do so, the Company has the right under the Plan to terminate the Plan at any time subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). NOTE E.-RELATED PARTY-IN-INTEREST TRANSACTIONS Certain Plan investments are shares of a money market fund managed by PNC Financial Services Group ("PNC"). PNC is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. In addition, certain plan investments are shares of the Healthcare Services Group, Inc. common stock. Healthcare Services Group, Inc. is the Plan sponsor as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. The Plan held 6,449.7252 and 6,198.7968 shares of Healthcare Services Group, Inc. common stock with a quoted market value of $133,574 and $129,183 at December 31, 2005 and 2004, respectively. -8- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 NOTE F.-TAX STATUS OF PLAN The Internal Revenue Service has determined and informed the Company by a letter dated March 7, 2001, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). The Plan has been amended since receiving the determination letter. However, an amendment required by IRS regulations has not been adopted as of December 31, 2005. The Plan has applied to the IRS under the Voluntary Correction Program to remedy this violation. Except for the violation noted above, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. NOTE G.-RISKS AND UNCERTAINTIES The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits. -9- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) SCHEDULE H, LINE 4I OF FORM 5500 (a) (b) (c) (e) Party-In- Identity of Description of Current Interest Issue Investment Value - --------- ----------------------------------- ----------------- ---------- * Healthcare Services Group Common Stock $ 133,574 AIM High Yield Fund Cl A Mutual Fund 7,650 American Beacon Sm Cap Value Mutual Fund 10,891 American Balanced Fund Mutual Fund 41,557 American Century Sm Cap Value Mutual Fund 13,830 American Century Value Fund Mutual Fund 20,913 Growth Fund of America Mutual Fund 119,469 Income Fund of America Mutual Fund 49,221 BlackRock GNMA Fund Inv A Mutual Fund 5,922 BlackRock Managed Inc Fund Inv A Mutual Fund 14,033 Federated High Income Bond Fund Mutual Fund 21,089 Federated Stock Trust Mutual Fund 48,052 Fidelity Advisor Equity Growth Mutual Fund 74,918 Fidelity Advisor Equity Income Mutual Fund 137,023 * Healthcare Services Stock Liquidity Cash 560 AIM Dynamics Fund Cl A Mutual Fund 12,382 AIM Global Health Care Fund Mutual Fund 26,448 AIM Technology Fund Cl A Mutual Fund 40,056 Janus Adviser Forty Fund Mutual Fund 138,841 Janus Adviser Lg Cap Growth Fund Mutual Fund 83,452 MFS Int'l New Discovery Fund Mutual Fund 51,495 MFS New Endeavor Fund Mutual Fund 3,313 Royce Low Priced Stock Fund Mutual Fund 15,873 Royce Opportunity Fund Mutual Fund 6,160 * BlackRock Money Market (PNC) Money Market Fund 475,145 ---------- $1,551,867 ========== -10- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. Healthcare Services Group, Inc. Retirement Savings Plan Date: June 26, 2006 /s/ James L. DiStefano --------------------------------- By: James L. DiStefano Title: Chairman of Plan Committee -11- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 CERTIFICATION: I, Daniel P. McCartney, Chief Executive Officer, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Healthcare Services Group, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures ( as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting ( as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have; a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation and; d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors. a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting Date: June 26, 2006 /s/ Daniel P. McCartney --------------------------------- Daniel P. McCartney Chief Executive Officer -12- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 I, James L. DiStefano, Chief Financial Officer, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Healthcare Services Group, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures ( as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting ( as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have; a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation and; d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's Board of Directors. a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: June 26, 2006 /s/ James L. DiStefano --------------------------------- James L. DiStefano Chief Financial Officer -13- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Healthcare Services Group, Inc. Retirement Savings Plan on Form 11-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Form 11-K"), I, Daniel P. McCartney, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 1. The Form 11-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d); and 2. The information contained in the Form 11-K fairly presents, in all material respects, the financial condition and results of operations of the Plan. /s/ Daniel P. McCartney --------------------------------- Daniel P. McCartney Chief Executive Officer June 26, 2006 -14- HEALTHCARE SERVICES GROUP, INC. RETIREMENT SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 2005 AND 2004 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Healthcare Services Group, Inc. Retirement Savings Plan on Form 11-K for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Form 11-K"), I, James L. DiStefano, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: 3. The Form 11-K fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d); and 4. The information contained in the Form 11-K fairly presents, in all material respects, the financial condition and results of operations of the Plan. /s/ James L. DiStefano --------------------------------- James L. DiStefano Chief Financial Officer June 26, 2006 -15- -----END PRIVACY-ENHANCED MESSAGE-----