Healthcare Services Group, Inc. Reports Results for the Three and Nine Months Ended September 30, 2008 and Declares Increased Third Quarter 2008 Cash Dividend

Market Wire, October, 2008

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


                                     September 30, 2008  December 31, 2007
                                     ------------------  ------------------

Cash and cash equivalents            $       93,572,000  $       92,461,000
Accounts receivable, net                     94,689,000          82,951,000
Other current assets                         21,730,000          19,686,000
  Total current assets                      209,991,000         195,098,000

Property and equipment, net                   3,984,000           4,303,000
Notes receivable- long term, net              4,187,000           6,058,000
Goodwill, net                                15,020,000          15,020,000
Other Intangible Assets, net                  5,298,000           6,090,000
Deferred compensation funding                 9,310,000          10,361,000
Other assets                                  6,800,000           6,438,000
                                     ------------------  ------------------

Total Assets                         $      254,590,000  $      243,368,000
                                     ==================  ==================


Accrued insurance claims- current    $        4,306,000  $        4,302,000
Other current liabilities                    30,876,000          23,579,000
                                     ------------------  ------------------
  Total current liabilities                  35,182,000          27,881,000

Accrued insurance claims- long term          10,047,000          10,037,000
Deferred compensation liability               9,589,000          10,732,000
Stockholders' equity                        199,772,000         194,718,000
                                     ------------------  ------------------

Total Liabilities and Stockholders'
 Equity                              $      254,590,000  $      243,368,000
                                     ==================  ==================



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

                                           For the Three Months Ended
                                                 September 30,
                                           2008                 2007
                                     -----------------   ------------------

Revenues                             $     152,978,000   $      146,669,000
Operating costs and expenses:
   Cost of services provided               134,228,000          126,064,000
   Selling, general and administrative       9,615,000            9,865,000
                                     -----------------   ------------------

Income from operations                       9,135,000           10,740,000
Other income:
   Investment and interest income             (157,000)           1,128,000
                                     -----------------   ------------------

Income before income taxes                   8,978,000           11,868,000
Income taxes                                 3,456,000            4,569,000
                                     -----------------   ------------------

Net income                           $       5,522,000   $        7,299,000
                                     =================   ==================

Basic earnings per common share      $             .13   $              .17
                                     =================   ==================

Diluted earnings per common share    $             .13   $              .17
                                     =================   ==================

Cash dividends per common share      $             .15   $              .11
                                     =================   ==================
Basic weighted average number of
 common shares outstanding                  43,143,000           42,606,000
                                     =================   ==================

Diluted weighted average number of
 common shares outstanding                  43,980,000           43,969,000
                                     =================   ==================



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

                                           For the Nine Months Ended
                                                 September 30,
                                           2008                 2007
                                     -----------------   ------------------

Revenues                             $     448,155,000   $      430,743,000
Operating costs and expenses:
   Cost of services provided               387,157,000          367,480,000
   Selling, general and administrative      30,318,000           30,481,000
                                     -----------------   ------------------

Income from operations                      30,680,000           32,782,000
Other income:
   Investment and interest income              753,000            3,436,000
                                     -----------------   ------------------

Income before income taxes                  31,433,000           36,218,000
Income taxes                                12,102,000           13,944,000
                                     -----------------   ------------------

Net income                           $      19,331,000   $       22,274,000
                                     =================   ==================

Basic earnings per common share      $             .45   $              .53
                                     =================   ==================

Diluted earnings per common share    $             .44   $              .51
                                     =================   ==================

Cash dividends per common share      $             .42   $              .30
                                     =================   ==================
Basic weighted average number of
 common shares outstanding                  43,078,000           42,134,000
                                     =================   ==================

Diluted weighted average number of
 common shares outstanding                  44,050,000           43,783,000
                                     =================   ==================