HEALTHCARE SERVICES GROUP, INC. REPORTS RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2010 Bensalem, PA

HEALTHCARE SERVICES GROUP, INC. REPORTS

RESULTS FOR THE THREE MONTHS ENDED

Bensalem, PA April 13, 2010 Healthcare Services Group, Inc. (NASDAQ-HCSG) reported that revenues

for the three months ended March 31, 2010 increased 15% to $183,801,000 compared to $160,409,000

for the same 2009 period. Net income for the three months ended March 31, 2010 was $7,428,000 or

$.17 per basic and per diluted common share, compared to the 2009 first quarter net income of

$7,736,000 or $.18 per basic and per diluted common share.

Additionally, our Board of Directors declared a regular quarterly cash dividend of $.22 per

common share, payable on May 14, 2010 to shareholders of record at the close of business April 23,

2010. This represents a 5% increase over the dividend declared for the 2009 fourth quarter and a

22% increase over the dividend declared for the same 2009 period payment. It is the 28th

consecutive regular quarterly cash dividend payment, as well as the 27th consecutive

increase since our initiation of regular quarterly cash dividend payments in 2003.

The Company will host a conference call on Wednesday, April 14, 2010 at 8:30 AM Eastern Time

to discuss its results for the three month period ended March 31, 2010. The call in numbers will be

800-766-6630 and 416-695-6616.

Cautionary Statement Regarding Forward-Looking Statements

This release 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 11% of

revenues in the three month period ended March 31, 2010; 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, 2009 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 has affected through the enactment of a number of major laws during the past decade, most

recently the March 2010 enactment of the Patient Protection and Affordable Care Act and the Health

Care and Education Reconciliation Act of 2101. Currently, the U.S. Congress is considering changes

or revising legislation to reform health care in the United States which, among other initiatives,

may impose cost containment measures impacting our clients. These laws and proposed 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 dietary services to long-term care and related facilities.

HEALTHCARE SERVICES GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

HEALTHCARE SERVICES GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS