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% o

HEALTHCARE SERVICES GROUP, INC.

REPORTS RESULTS FOR THE THREE MONTHS AND YEAR ENDED

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

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.

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

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.

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.

HEALTHCARE SERVICES GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

HEALTHCARE SERVICES GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

HEALTHCARE SERVICES GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME