Press Releases

BENSALEM, PA -- (MARKET WIRE) -- 02/09/10 -- Healthcare Services Group, Inc. (NASDAQ: HCSG) reported that revenues for the three months ended December 31, 2009 increased 18% to $182,561,000 compared to $154,563,000 for the same 2008 period. Net income for the three months ended December 31, 2009 was $6,566,000 or $.15 per basic and per diluted common share, compared to the 2008 fourth quarter net income of $7,283,000 or $.17 per basic and per diluted common share.

The Company also reported that revenues for the year ended December 31, 2009 increased 15% to $692,695,000 compared to $602,718,000 for the same 2008 period. In addition, net income for the year ended December 31, 2009 increased over 14% to $30,342,000 or $.70 per basic and $.69 per diluted common share compared to the year ended December 31, 2008 net income of $26,614,000 or $.62 per basic and $.60 per diluted common share.

Additionally, on January 26, 2010, our Board of Directors declared a regular quarterly cash dividend of $.21 per common share, payable on March 5, 2010 to shareholders of record at the close of business February 12, 2010. This represents a 5% increase over the dividend declared for the 2009 third quarter and a 24% increase over the 2008 same period payment. It is the 27th consecutive regular quarterly cash dividend payment, as well as the 26th consecutive increase since our initiation of regular quarterly cash dividend payments in 2003.

The Company also announced that it will make a presentation on February 10, 2010 regarding the Company at the "UBS Warburg Global Healthcare Services Conference" at the Grand Hyatt in New York City. This presentation will also be audio webcast at www.ibb.ubs.com.

The Company will host a conference call today at 4:30 PM Eastern Time to discuss its results for the three month and twelve month periods ended December 31, 2009. The call in numbers will be 800-769-8320 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 12% of revenues in the year ended December 31, 2009; 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, 2008 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. Currently, the U.S. Congress is considering 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 food services to long-term care and related facilities.

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

                                                  December 31, December 31,
                                                      2009         2008
                                                  ------------ ------------
Cash and cash equivalents                         $ 31,301,000 $ 37,501,000
Marketable securities, net                          52,648,000   49,413,000
Accounts receivable, net                           104,356,000   96,558,000
Other current assets                                23,865,000   23,143,000
  Total current assets                             212,170,000  206,615,000

Property and equipment, net                          4,391,000    3,929,000
Notes receivable- long term, net                     4,623,000    3,201,000
Goodwill, net                                       17,087,000   15,020,000
Other Intangible Assets, net                         8,862,000    5,033,000
Deferred compensation funding                       10,783,000    8,287,000
Other assets                                         7,976,000    6,476,000
                                                  ------------ ------------

Total Assets                                      $265,892,000 $248,561,000
                                                  ============ ============


Accrued insurance claims- current                 $  4,844,000 $  3,943,000
Other current liabilities                           29,873,000   25,099,000
                                                  ------------ ------------
  Total current liabilities                         34,717,000   29,042,000

Accrued insurance claims- long term                 11,302,000    9,201,000
Deferred compensation liability                     11,099,000    8,636,000
Stockholders' equity                               208,774,000  201,682,000
                                                  ------------ ------------

Total Liabilities and Stockholders' Equity        $265,892,000 $248,561,000
                                                  ============ ============




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

                                                 For the Three Months Ended
                                                        December 31,
                                                      2009         2008
                                                  ------------ ------------
Revenues                                          $182,561,000 $154,563,000
Operating costs and expenses:
   Cost of services provided                       158,765,000  134,113,000
   Selling, general and administrative              13,941,000    9,204,000
                                                  ------------ ------------
Income from operations                               9,855,000   11,246,000

Other income:
   Investment and interest income                      821,000      596,000
                                                  ------------ ------------
Income before income taxes                          10,676,000   11,842,000
Income taxes                                         4,110,000    4,559,000
                                                  ------------ ------------
Net income                                        $  6,566,000 $  7,283,000
                                                  ============ ============

Basic earnings per common share                   $        .15 $        .17
                                                  ============ ============

Diluted earnings per common share                 $        .15 $        .17
                                                  ============ ============

Cash dividends per common share                   $        .20 $        .16
                                                  ============ ============
Basic weighted average number of common shares
 outstanding                                        43,715,000   43,290,000
                                                  ============ ============

Diluted weighted average number of common shares
 outstanding                                        44,470,000   43,948,000
                                                  ============ ============




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

                                                     For the Year Ended
                                                        December 31,
                                                      2009         2008
                                                  ------------ ------------
Revenues                                          $692,695,000 $602,718,000
Operating costs and expenses:
   Cost of services provided                       597,715,000  521,269,000
   Selling, general and administrative              50,269,000   39,523,000
                                                  ------------ ------------
                                                    44,711,000   41,926,000

Other income:
   Investment and interest income                    4,624,000    1,349,000
                                                  ------------ ------------
Income before income taxes                          49,335,000   43,275,000
Income taxes                                        18,993,000   16,661,000
                                                  ------------ ------------
Net income                                        $ 30,342,000 $ 26,614,000
                                                  ============ ============

Basic earnings per Common Share                   $        .70 $        .62
                                                  ============ ============

Diluted earnings per Common Share                 $        .69 $        .60
                                                  ============ ============

Cash dividends per common share                   $        .74 $        .58
                                                  ============ ============
Basic weighted average number of common shares
 outstanding                                        43,584,000   43,131,000
                                                  ============ ============

Diluted weighted average number of common shares
 outstanding                                        44,286,000   44,025,000
                                                  ============ ============

Company Contacts:
Daniel P. McCartney
Chairman and Chief Executive Officer
215-639-4274

Thomas Cook
President
215-639-4274

CLEARWATER, Fla., Feb. 9, 2010 (GLOBE NEWSWIRE) -- Avantair, Inc. (OTCBB: AAIR), the sole North American provider of flight hour cards and fractional shares in the Piaggio Avanti aircraft, today announced financial results for its fiscal 2010 second quarter ended December 31, 2009.

For the second quarter of fiscal 2010, Avantair reported revenue of $35.8 million, and net loss attributable to common stockholders of $554,000, or $0.02 per share.

Second Quarter Fiscal 2010 Highlights:

  --  Flight hour cards sold for the three months ended December 31, 2009
      increased 16% to 100, from 86 flight hour cards sold during the first
      quarter ended September 30, 2009, and 89% from 53 flight hour cards sold
      during the second quarter ended December 31, 2008.
  --  Revenue generating flight hours flown reached a new quarterly record,
      increasing 4.4% quarter-over-quarter to 9,770 hours, compared to 9,356
      hours for the fiscal 2010 first quarter ended September 30, 2009, and
      increasing 17.3% year-over-year compared to 8,328 for the fiscal 2009
      second quarter ended December 31, 2008.
  --  Operating income of $1.4 million, including an $850,000 gain on sale of
      assets, compared with an operating loss of $628,000 in the second fiscal
      quarter of 2009.
  --  EBITDA (earnings before interest, income taxes, depreciation and
      amortization) of $2.8 million, including an $850,000 gain on sale of
      assets, compared with EBITDA of $690,000 in the second quarter of fiscal
      2009.
  --  Net loss attributable to common stockholders of $554,000, or $0.02 per
      share, based on 24.6 million weighted average shares outstanding,
      compared with a net loss attributable to common stockholders of $2.3
      million, or $0.15 per share, based on 15.3 million weighted average
      shares outstanding for the second quarter of fiscal 2009.
  --  Completed the final tranche of a private placement of common stock for
      total net cash proceeds of $8.4 million, for total net proceeds of
      approximately $9.9 million.
  --  Retired approximately $6.5 million of long- and short-term debt.
  --  As of December 31, 2009, Avantair had cash and cash equivalents of $6.8
      million, compared with cash and cash equivalents of $3.8 million as of
      June 30, 2009.
  --  Increased fleet size to 55 aircraft, with four new Piaggio Avanti II
      aircraft.

Steven Santo, Chief Executive Officer of Avantair, stated, "Our recurring financial gains are a testament to the success of our business model. Despite a difficult economic environment, Avantair continues to thrive making considerable market share gains. We are currently the leading private aircraft provider in the light jet cabin category in terms of number of owners with approximately 28% market share as of November 2009. In addition to improving our market share, we are delighted with the high volume of customers who are new to private air travel; this growth market constituency accounted for approximately 20% of our new clientele during the quarter.

"During the quarter, we continued to grow our revenue and operating income, demonstrating increases on both a year-over-year and sequential quarter basis. We also made important strides with our balance sheet based on the completion of our private placement of common stock in October. We effectively improved our equity position, paid down a portion of our long- and short-term debt, and enhanced our working capital position.

"For the second consecutive quarter, we reported record gains in revenue generating flight hours and flight hour card sales. We are also gaining significant traction with our Axis Club memberships and reached new heights with this program, adding six times the unit sales in the December quarter from the prior period. Fractional share sales, while vastly under the levels we experienced a year ago, are beginning to demonstrate signs of resurgence as we added five new fractional unit sales in the fiscal 2010 second quarter, up from two in the previous quarter. Our renewal rate of our fractional owners remains extremely high at approximately 91%. While this exceptional rate of return business renders us considerably less dependent on new sales, we continue to attract new customers, further accelerating our growth.

"We also increased our fleet size to 55, with the addition of four new Piaggio Avanti II aircraft and the sale of one core aircraft. Given our larger fleet size, we are increasingly realizing economies of scale, enabling us to add new customers without incurring additional significant costs. With our foundation firmly in place, we are executing on a scalable model to service both our continued satisfied customers and new owners as we broaden our market presence and build our brand equity," Mr. Santo concluded.

Conference Call

Chief Executive Officer Steven Santo, Chief Financial Officer Richard Pytak and Chief Operating Officer Kevin Beitzel will hold a conference call with the financial community today at 5:00 p.m. Eastern time to review the Company's financial results and provide an update on business developments.

Interested parties may participate in the conference call by dialing 1-888-549-7704 (1-480-629-9857 for international callers). When prompted, ask for the "Avantair, Inc. Fiscal 2010 Second Quarter Earnings Conference Call." A telephonic replay of the conference call may be accessed approximately two hours after the call through February 23, 2010 by dialing 800-406-7325 (303-590-3030 for international callers). The replay access code is 4220150#. The conference call will be webcast simultaneously on the Avantair, Inc. website at www.avantair.com under Investors: Event Calendar. The webcast replay will be archived for 12 months.

Use of Non-GAAP Measures of Performance

The following reconciles net loss as calculated in conformity with generally accepted accounting principles to earnings before interest, income taxes, depreciation and amortization (EBITDA):

                                  Three Months Ended December
                                              31,
                                  ---------------------------

                                     2009            2008
                                  ----------     ------------
  Net loss                        $(182,084)     $(1,884,091)
  Add:
   Depreciation and amortization   1,408,874        1,318,256
   Interest expense                1,587,319        1,294,899
  Subtract:

   Interest and other income        (10,372)         (38,704)
                                  ----------     ------------
  Earnings before interest,
   income taxes, depreciation
   and amortization               $2,803,737         $690,360
                                  ==========     ============

The Company believes that EBITDA is useful to investors as it excludes certain non-cash expenses that do not directly relate to the operation of aircraft. This measure is a supplement to generally accepted accounting principles (GAAP) used to prepare the Company's financial statements and should not be viewed as a substitute for GAAP measures. In addition, the Company's non-GAAP measure may not be comparable to non-GAAP measures of other companies.

About Avantair

Avantair, the only publicly traded stand-alone private aircraft operator and the sole North American provider of fractional shares and flight hour cards in the Piaggio Avanti aircraft, is headquartered in Clearwater, FL, with over 400 employees. The Company offers private travel solutions for individuals and businesses traveling within its service area, which includes the continental United States, Canada, the Caribbean and Mexico, at a fraction of the cost of whole aircraft ownership. The Company currently manages a fleet of 55 aircraft, with another 52 Piaggio Avanti aircraft on order through 2013. For more information about Avantair, please visit: http://www.avantair.com.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Avantair's future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" and similar expressions. Avantair cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and Avantair assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to factors previously disclosed in Avantair's filings with the Securities and Exchange Commission (SEC) and those as may be identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: general economic and business conditions in the U.S. and abroad, changing interpretations of generally accepted accounting principles, changes in market acceptance of the company's products, inquiries and investigations and related litigation, fluctuations in customer demand, management of rapid growth, intensity of competition. The information set forth herein should be read in light of such risks. Avantair does not assume any obligation to update the information contained in this press release.

Avantair's filings with the SEC, accessible on the SEC's website at http://www.sec.gov , discuss these factors in more detail and identify additional factors that can affect forward-looking statements.

             AVANTAIR, INC. AND SUBSIDIARIES
          Condensed Consolidated Balance Sheets

                         ASSETS

                             December 31,    June 30,

                                 2009          2009
                             ------------  ------------
                              (Unaudited)
  CURRENT ASSETS
   Cash and cash
    equivalents                $6,845,803    $3,773,789
   Accounts receivable, net
    of allowance for
    doubtful accounts
    of$249,082 at December
    31, 2009 and $187,842
    at June 30, 2009            8,248,661     5,711,055
   Inventory                      145,601       140,997
   Current portion of
    aircraft costs related
    to fractional share
    sales                      33,172,942    36,910,206
   Notes receivable                 8,333       272,731
   Prepaid expenses and
    other current assets        3,476,348     1,278,506
                             ------------  ------------


  Total current assets         51,897,688    48,087,284
                             ------------  ------------

  Aircraft costs related to
   fractional share sales,
   net of current portion      54,434,241    70,199,786
                             ------------  ------------

  Property and equipment,
   at cost, net of
   accumulated depreciation
   and amortization of
   $14,089,659 at December
   31, 2009 and $11,695,228
   at June 30, 2009            24,961,658    29,842,365
                             ------------  ------------

  OTHER ASSETS
   Cash- restricted             2,356,695     2,352,337
   Deposits on aircraft         8,068,616     9,264,890
   Deferred maintenance on
    aircraft engines            1,319,368     1,538,175
   Goodwill                     1,141,159     1,141,159

   Other assets                 2,588,806     1,639,407
                             ------------  ------------


  Total other assets           15,474,644    15,935,968
                             ------------  ------------



  Total assets               $146,768,231  $164,065,403
                             ============  ============

                   AVANTAIR, INC. AND SUBSIDIARIES
               Condensed Consolidated Balance Sheets

               LIABILITIES AND STOCKHOLDERS' DEFICIT

                                        December 31,    June 30,

                                            2009          2009
                                        ------------  ------------
                                        (Unaudited)
  CURRENT LIABILITIES
   Accounts payable                       $4,744,325    $7,307,320
   Accrued liabilities                     4,184,869     5,010,745
   Customer deposits                       1,094,657     1,282,936
   Short-term debt                        11,000,000    11,500,000
   Current portion of long-term debt       4,358,496    11,020,590
   Current portion of deferred revenue
    related to fractional aircraft
    share sales                           38,478,834    43,385,779
   Unearned management fee, flight
    hour card and Axis Club Membership
    revenues                              26,324,962    17,807,796
                                        ------------  ------------


  Total current liabilities               90,186,143    97,315,166
                                        ------------  ------------

   Long-term debt, net of current
    portion                               17,389,675    20,111,011
   Deferred revenue related to
    fractional aircraft share sales,
    net of current portion                49,734,497    65,071,197
   Deferred revenue related to Axis
    Club Membership sales, net of
    current portion                        1,113,221       333,271

   Other liabilities                       2,745,693     2,714,058
                                        ------------  ------------


  Total long-term liabilities             70,983,086    88,229,537
                                        ------------  ------------


  Total liabilities                      161,169,229   185,544,703
                                        ------------  ------------

  COMMITMENTS AND CONTINGENCIES

  Series A convertible preferred
   stock, $.0001 par value, authorized
   300,000 shares; 152,000 shares
   issued and outstanding                 14,573,466    14,528,383
                                        ------------  ------------

  STOCKHOLDERS' DEFICIT
   Preferred stock, $.0001 par value,
    authorized 700,000 shares; none
    issued                                        --            --
   Common stock, Class A, $.0001 par
    value, 75,000,000 shares
    authorized, 26,323,062 shares
    issued and outstanding at December
    31, 2009 and 16,463,615 shares
    issued and outstanding at June 30,
    2009                                       2,632         1,646
   Additional paid-in capital             56,978,048    47,667,493

   Accumulated deficit                  (85,955,144)  (83,676,822)
                                        ------------  ------------


  Total stockholders' deficit           (28,974,464)  (36,007,683)
                                        ------------  ------------

  Total liabilities and stockholders'
   deficit                              $146,768,231  $164,065,403
                                        ============  ============

                             AVANTAIR, INC. AND SUBSIDIARIES
                          Consolidated Statement of Operations
                                       (Unaudited)


                                    Three Months Ended       Six Months Ended December
                                        December 31,                   31,
                                 -------------------------  --------------------------

                                    2009          2008          2009          2008
                                 -----------  ------------  ------------  ------------
  Revenue
  Fractional aircraft sold       $11,227,309   $14,372,747   $23,206,145   $26,866,462
  Maintenance and management
   fees                           18,290,025    17,702,350    36,264,594    34,779,489
  Flight hour card and Axis
   Club Membership revenue         4,976,763     2,125,787     8,835,234     4,492,012

  Other revenue                    1,270,860     1,213,496     2,663,868     1,952,878
                                 -----------  ------------  ------------  ------------


  Total revenue                   35,764,957    35,414,380    70,969,841    68,090,841
                                 -----------  ------------  ------------  ------------

  Operating expenses
  Cost of fractional aircraft
   shares sold                     9,476,794    12,323,154    19,677,397    22,928,177
  Cost of flight operations       13,304,306    12,402,387    25,724,544    24,212,790
  Gain on sale of assets           (849,584)            --     (897,594)            --
  Cost of fuel                     3,413,770     3,061,019     7,052,671     7,573,425
  General and administrative
   expenses                        6,234,754     5,828,778    12,535,145    11,489,545
  Selling expenses                 1,381,180     1,108,682     2,366,945     2,016,434

  Depreciation and amortization    1,408,874     1,318,256     2,866,791     2,400,521
                                 -----------  ------------  ------------  ------------

  Total operating expenses        34,370,094    36,042,276    69,325,899    70,620,892
                                 -----------  ------------  ------------  ------------


  Income (loss) from operations    1,394,863     (627,896)     1,643,942   (2,530,051)
                                 -----------  ------------  ------------  ------------

  Other income (expenses)
  Interest and other income           10,372        38,704        17,784        27,409

  Interest expense               (1,587,319)   (1,294,899)   (3,210,773)   (2,717,182)
                                 -----------  ------------  ------------  ------------

  Total other expenses           (1,576,947)   (1,256,195)   (3,192,989)   (2,689,773)
                                 -----------  ------------  ------------  ------------

  Net loss                         (182,084)   (1,884,091)   (1,549,047)   (5,219,824)

  Preferred stock dividend and
   accretion of expenses           (372,243)     (372,104)     (774,358)     (763,617)
                                 -----------  ------------  ------------  ------------
  Net loss attributable to
   common stockholders            $(554,327)  $(2,256,195)  $(2,323,405)  $(5,983,441)
                                 ===========  ============  ============  ============

  Loss per common share:

  Basic and diluted                  $(0.02)       $(0.15)       $(0.11)       $(0.39)
                                 ===========  ============  ============  ============

  Weighted- average common
   shares outstanding:

  Basic and diluted               24,583,880    15,288,523    20,528,498    15,291,035
                                 ===========  ============  ============  ============

CONTACT:  Avantair, Inc.
          Richard Pytak, Chief Financial Officer
          727-538-7910 x.105
          rpytak@avantair.com

          The Piacente Group, Inc.
          Investor Relations
          Kristen McNally
          Brandi Floberg
          212-481-2050
          avantair@tpg-ir.com