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HEALTHCARE SERVICES GROUP REPORTS RESULTS FOR THE YEAR END DEC. 31, 1991 AND THE THREE MONTHS ENDED MARCH 31, 1992

 HEALTHCARE SERVICES GROUP REPORTS RESULTS FOR THE YEAR END
 DEC. 31, 1991 AND THE THREE MONTHS ENDED MARCH 31, 1992
 HUNTINGDON VALLEY, Pa., May 15 /PRNewswire/ -- Healthcare Services Group, Inc. (NASDAQ-NMS: HCSG) announced today that the audit of its 1991 financial statements has been completed. The company reported revenues for the year ended Dec. 31, 1991, of $82,943,000 compared to $65,820,000 for the same period of 1990 representing a 26 percent increase. For 1991 the company recorded a net loss of $1,213,000 or $.16 per common share compared to net income of $4,329,000 or $.56 per common share for 1990. The net income and per common share amounts for 1990 have been restated as a result of the restatement of insurance expense for the period and to give effect to the company's three-for-two stock split effected by issuance of a 50 percent stock dividend on Nov. 15, 1991.
 The net loss for 1991 was primarily the result of recording, for the first time, estimated and projected settlement amounts for known claims and incurred but not reported claims under the company's retrospective insurance plans, which decreased 1991 net income by approximately $2,000,000 or $.26 per common share; revising its accounting policy of revenue recognition on the sale of laundry installations which, at Dec. 31, 1991, deferred approximately $2,370,000 of revenues and gross profit (approximately $1,420,000 of net income or $.18 per common share) into future periods; establishing, after recent discussion with its auditors, a $1,910,000 reserve (approximately $1,150,000 of not income or $.15 per common share) for possible contingent losses related to promissory notes receivable which the company sold to its bank; recording a $1,000,000 provision before income taxes (approximately $600,000 after tax or $.08 per common share) for the write-down of accounts receivables due under service agreements canceled during the quarter ended Sept. 30, 1990, which were obtained as part of the acquisition of American Services Company; and increasing the allowance for doubtful accounts by approximately $1,100,000 (decreasing net income by approximately $660,000 or $.09 per common share).
 All of the foregoing matters are discussed in detail in the company's Form 10-K Annual Report which will be filed with the Securities and Exchange Commission on May 18, 1992.
 In addition, the company reported revenues for the three months ended March 31, 1992, of $22,641,000 compared to $19,125,000 for the same 1991 quarter, representing an 18 percent increase. Net income for the three months ended March 31, 1992, was $1,070,000 or $.14 per common share compared to $816,000 or $.10 per common share for the same 1991 quarter, representing 31 percent increases in both net income and per common share amounts. The net income and per common share amounts for 1991 have been restated as a result of the restatement of insurance expense, the revised method of accounting for recognizing the gross profit on the sale of laundry installations and to give effect to the company's three-for-two stock split effected by issuance of a 50 percent stock dividend on Nov. 15, 1991.
 The company performs housekeeping, laundry and linen services to healthcare related facilities.
 HEALTHCARE SERVICES GROUP, INC.
 Statements of Income
 (audited)
 Years Ended Dec. 31 1991 1990(A)
 Revenues $82,943,000 $65,820,000
 Operating costs and expenses:
 Cost of services provided 75,249,000 53,903,000
 Selling, general and administrative 7,531,000 5,510,000
 Provision for service
 agreements canceled 1,000,000 --
 Provision for contingent losses on
 promissory note sales 1,910,000 --
 Other income:
 Other income 20,000 49,000
 Interest income 792,000 692,000
 Income (loss) before income taxes (1,935,000) 7,148,000
 Income taxes (benefits) (722,000) 2,819,000
 Net income (loss) $(1,213,000) $4,329,000
 Earnings (loss) per common share $(0.16) $0.56
 Weighted average common shares
 outstanding 7,725,708 7,680,503
 (A) -- Restated.
 HEALTHCARE SERVICES GROUP, INC.
 Condensed Balance Sheets
 (Audited)
 Dec. 31 1991 1990
 Cash and cash equivalents $ 9,759,000 $ 7,364,000
 Tax exempt marketable securities 124,000 2,846,000
 Accounts receivable - net 23,920,000 21,776,000
 Deferred income taxes - current 3,229,000 1,764,000
 Other current assets 5,867,000 4,025,000
 Property and equipment - net 5,817,000 5,388,000
 Intangible assets - net 1,284,000 1,353,000
 Cost in excess of fair value of
 net assets acquired - net 2,702,000 2,814,000
 Certificates of deposit pledged for
 loan guarantees 1,500,000 1,500,000
 Deferred income taxes 1,589,000 --
 Other non-current assets 3,599,000 5,432,000
 Total 59,390,000 54,262,000
 Accrued insurance claims 6,253,000 3,129,000
 Reserve for contingent losses on
 promissory notes sold 1,910,000 --
 Other current liabilities 5,981,000 5,069,000
 Stockholders' equity 45,246,000 46,064,000
 Total 59,390,000 54,262,000
 HEALTHCARE SERVICES GROUP, INC.
 Statements of Income
 (Unaudited)
 Three Months Ended March 31 1992 1991(A)
 Revenues $22,641,000 $19,125,000
 Operating costs & expenses:
 Cost of services provided 19,328,000 16,440,000
 Selling, general & admin. 1,723,000 1,585,000
 Other income:
 Other income (expense) 11,000 (6,000)
 Interest income 123,000 189,000
 Income before income taxes 1,724,000 1,283,000
 Income taxes 655,000 467,000
 Net income 1,069,000 816,000
 Earnings per common share $0.14 $0.10
 Weighted average common shares
 outstanding 7,892,797 7,525,458
 -0- 5/15/92
 /CONTACT: Daniel P. McCartney, president and chairman, or Thomas A. Cook, executive vice president and chief financial officer of Healthcare Services Group, 215-938-1661/
 (HCSG) CO: Healthcare Services Group, Inc. ST: Pennsylvania IN: SU: ERN


PS -- NY111 -- 1046 05/15/92 19:42 EDT
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