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HEALTHCARE SERVICES GROUP ISSUES STATEMENT

 HEALTHCARE SERVICES GROUP ISSUES STATEMENT
 HUNTINGDON VALLEY, Pa., April 2 /PRNewswire/ -- The following


statement was released today by Healthcare Services Group (NASDAQ-NMS: HCSG):
 Healthcare Services Group (the "Company") announced today that it had been named as a defendant in two purported class actions filed in the United States District Court for the Eastern District of Pennsylvania. Both lawsuits follow the Company's announcement, on March 9, 1992, that during the audit of its 1991 financial statements the Company discovered inaccuracies in the accounting treatment of general liability, automobile and workmen's compensation insurance which would adversely impact its results of operations for 1986 through 1990 and for the first three quarters of 1991. The Company also stated that it was "currently analyzing the magnitude of this adjustment and other audit adjustments which will adversely affect its financial statements." On March 31, 1992, the Company made a further announcement with respect to these matters.
 The lawsuits are Elsman v. Healthcare Services Group, Inc., et. al. and Chuvala et. al. v. Healthcare Services Group, Inc., et. al., both of which also name Ernst & Young and certain directors and executive officers as defendants. Both actions allege that the plaintiffs represent purchasers of the Company's stock between March 12, 1990, and March 6, 1992, the date preceding the aforementioned announcement. The plaintiff in the Elsman action claims to be the holder of 300 shares of the Company's stock and the plaintiffs in the Chuvala action claim to hold 350 shares. Both actions claim that the defendants violated certain federal securities laws by furnishing allegedly false and misleading financial information in the Company's financial reports during the class period. The Company intends to vigorously defend against these actions and anticipates that it may incur substantial legal expenses in order to do so. The Company had already been defending against a purported class action entitled Murphy v. Healthcare pending in the same court. No reserve for such expenses or potential liabilities for these lawsuits has been established.
 /delval/
 -0-
 4/2/92
 /CONTACT: Healthcare Services Group, 215-938-1661, or 800-523-2248/
 (HCSG) CO: Healthcare Services Group, Inc. ST: Pennsylvania IN: SU:


CC -- PH048 -- 4649 04/02/92 18:42 EST
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Publication:PR Newswire
Date:Apr 2, 1992
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