HispanicBusiness

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.

                       HEALTHCARE SERVICES GROUP, INC.                      CONSOLIDATED STATEMENTS OF INCOME                                 (Unaudited)                          For the Three Months                                 Ended                For the Year Ended                              December, 31               December, 31                       ------------------------- ---------------------------                           2012         2011          2012          2011                       ------------ ------------ -------------- ------------Revenues               $277,039,000 $250,239,000 $1,077,435,000 $889,065,000Operating costs and expenses:Cost of services provided               238,832,000  217,190,000    930,814,000  766,958,000Selling, general and administrative          18,982,000   18,671,000     79,277,000   65,306,000                       ------------ ------------ -------------- ------------Income from operations   19,225,000   14,378,000     67,344,000   56,801,000Other income:Investment and interest                   400,000    1,189,000      2,920,000    1,011,000                       ------------ ------------ -------------- ------------Income before income taxes                   19,625,000   15,567,000     70,264,000   57,812,000Income taxes              6,827,000    5,002,000     26,050,000   19,656,000                       ------------ ------------ -------------- ------------Net income             $ 12,798,000 $ 10,565,000 $   44,214,000 $ 38,156,000                       ============ ============ ============== ============Basic earnings per common share          $       0.19 $       0.16 $         0.65 $       0.57                       ============ ============ ============== ============Diluted earnings per common share          $       0.19 $       0.16 $         0.65 $       0.56                       ============ ============ ============== ============Cash dividends per common share          $       0.17 $       0.16 $         0.65 $       0.63                       ============ ============ ============== ============Basic weighted average number of common shares outstanding      68,007,000   66,812,000     67,511,000   66,637,000                       ============ ============ ============== ============Diluted weighted average number of common shares outstanding             68,988,000   67,705,000     68,485,000   67,585,000                       ============ ============ ============== ============                       HEALTHCARE SERVICES GROUP, INC.                    CONDENSED CONSOLIDATED BALANCE SHEETS                                 (Unaudited)                                                December 31,   December 31,                                                    2012           2011                                               -------------- --------------Cash and cash equivalents                      $   68,949,000 $   38,639,000Marketable securities, at fair value               21,322,000     31,337,000Accounts and notes receivable, net                140,218,000    130,744,000Other current assets                               37,357,000     31,401,000                                               -------------- --------------Total current assets                              267,846,000    232,121,000Property and equipment, net                        10,272,000      9,763,000Notes receivable - long term, net                   1,823,000      1,483,000Goodwill                                           16,955,000     16,955,000Other intangible assets, net                        5,203,000      7,372,000Deferred compensation funding                      17,831,000     13,780,000Other assets                                       11,253,000      8,221,000                                               -------------- --------------Total Assets                                   $  331,183,000 $  289,695,000                                               ============== ==============Accrued insurance claims - current             $    6,850,000 $    5,296,000Other current liabilities                          60,814,000     40,091,000                                               -------------- --------------Total current liabilities                          67,664,000     45,387,000Accrued insurance claims - long term               15,712,000     12,358,000Deferred compensation liability                    18,237,000     14,224,000Stockholders' equity                              229,570,000    217,726,000                                               -------------- --------------Total Liabilities and Stockholders' Equity     $  331,183,000 $  289,695,000                                               ============== ==============