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 10, 2012

HEALTHCARE SERVICES GROUP, INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 0-12015

Pennsylvania	23-2018365
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer 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

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:

¨ 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 CFR240.14d-2(b))

¨ 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 10, 2012, Healthcare Services Group, Inc. issued a press release (the “Press Release”) announcing its earnings for the three and six month periods ended June 30, 2012. 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 July 10, 2012.

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.
Date: July 11, 2012	By:	/s/ John C. Shea
		Chief Financial Officer and Secretary

EXHIBIT INDEX

Exhibit:
99.1	Press Release and financial tables dated July 10, 2012 issued by Healthcare Services Group, Inc.

EX-99.1

Exhibit 99.1

HEALTHCARE SERVICES GROUP, INC. REPORTS

RESULTS FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2012 AND DECLARES INCREASED SECOND

QUARTER 2012 CASH DIVIDEND

Bensalem, PA — July 10, 2012, Healthcare Services Group, Inc. (NASDAQ-HCSG) reported that revenues for the three months ended June 30, 2012 increased over 26% to $267,108,000 compared to $211,507,000 for the same 2011 period. Net income for the three months ended June 30, 2012 increased 15% to $11,320,000 or $.17 per basic and per diluted common share, compared to the 2011 second quarter net income of $9,828,000 or $.15 per basic and per diluted common share.

Revenues for the six months ended June 30, 2012 increased over 25% to $527,715,000 compared to $419,897,000 for the same 2011 period. Net income for the six months ended June 30, 2012 increased 13% to $19,899,000 or $.30 per basic and $.29 per diluted common share, compared to the 2011 six month period net income of $17,595,000 or $.26 per basic and per diluted common share.

Additionally, our Board of Directors declared a regular quarterly cash dividend of $.16375 per common share, payable on August 24, 2012 to shareholders of record at the close of business on July 27, 2012. This represents the 37th consecutive regular quarterly cash dividend payment, as well as the 36th consecutive increase since our initiation of regular quarterly cash dividend payments in 2003.

The Company will host a conference call on Wednesday, July 11, 2012 at 8:30 AM Eastern Time to discuss its results for the three and six month period ended June 30, 2012. The call in number will be 888-378-4353. Passcode #9677754.

Cautionary Statement Regarding Forward-Looking Statements

This release and any schedules incorporated by reference into it may 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, which are not historical facts but rather are 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; from having several significant clients who each individually contributed at least 3% with one as high as 7% to our total consolidated revenues in the three and six month period ended June 30, 2012; 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, 2011 in 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 and related agencies have affected through the enactment of a number of major laws and regulations during the past decade, including the March 2010 enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. Most recently, on July 29, 2011, the United States Center for Medicare Services issued final rulings which, among other things, will reduce Medicare payments to nursing centers by 11.1% and change the reimbursement for the provision of group rehabilitation therapy services to Medicare beneficiaries. Currently, the U.S. Congress is considering further changes or revising legislation relating to health care in the United States which, among other initiatives, may impose cost containment measures impacting our clients. These laws and proposed laws and forthcoming regulations have significantly altered, or threaten to significantly alter, overall government reimbursement funding rates and mechanisms. The overall effect of these laws and trends in the long-term care industry has 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 dietary services to long-term care and related health care facilities.

Company Contacts:
Daniel P. McCartney	Theodore Wahl
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 Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2012			2011		2012		2011
Revenues	$	267,108,000		$	211,507,000	$	527,715,000	$	419,897,000
Operating costs and expenses:
Cost of services provided		230,206,000			181,742,000		457,701,000		361,727,000
Selling, general and administrative		18,524,000			15,511,000		39,506,000		32,291,000
Income from operations		18,378,000			14,254,000		30,508,000		25,879,000
Other income (loss):
Investment and interest		(95,000	)		463,000		1,558,000		1,177,000
Income before income taxes		18,283,000			14,717,000		32,066,000		27,056,000
Income taxes		6,963,000			4,889,000		12,167,000		9,461,000
Net income	$	11,320,000		$	9,828,000	$	19,899,000	$	17,595,000
Basic earnings per common share	$	.17		$	.15	$	.30	$	.26
Diluted earnings per common share	$	.17		$	.15	$	.29	$	.26
Cash dividends per common share	$	.16		$	.16	$	.32	$	.31
Basic weighted average number of common shares outstanding		67,296,000			66,517,000		67,189,000		66,459,000
Diluted weighted average number of common shares outstanding		68,228,000			67,545,000		68,155,000		67,499,000

HEALTHCARE SERVICES GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2012		December 31, 2011
Cash and cash equivalents	$	55,599,000	$	38,639,000
Marketable securities, at fair value		21,398,000		31,337,000
Accounts receivable, net		135,795,000		130,744,000
Other current assets		37,532,000		31,401,000
Total current assets		250,324,000		232,121,000
Property and equipment, net		10,132,000		9,763,000
Notes receivable- long term, net		2,973,000		1,483,000
Goodwill, net		16,955,000		16,955,000
Other Intangible Assets, net		6,288,000		7,372,000
Deferred compensation funding		15,795,000		13,780,000
Other assets		9,957,000		8,221,000
Total Assets	$	312,424,000	$	289,695,000
Accrued insurance claims- current	$	6,341,000	$	5,296,000
Other current liabilities		53,097,000		40,091,000
Total current liabilities		59,438,000		45,387,000
Accrued insurance claims- long term		14,797,000		12,358,000
Deferred compensation liability		16,132,000		14,224,000
Stockholders’ equity		222,057,000		217,726,000
Total Liabilities and Stockholders’ Equity	$	312,424,000	$	289,695,000