Genesis Health Ventures Reports Third Quarter '97 Results.

KENNETT SQUARE, Pa.--(BW HealthWire)--Aug. 6, 1997--Genesis Health Ventures Inc. (NYSE:GHV) Wednesday announced results for the third quarter of fiscal year 1997.

Revenues for the third quarter ended June 30, 1997 were $284.5 million, representing an increase of 65% over revenues of $172.8 million during the corresponding period of fiscal 1996.

Net income for the third quarter increased 54% to $15.6 million, or 43 cents per share on 36.4 million fully-diluted, weighted average shares outstanding, compared with $10.1 million or 35 cents per share on 31.1 million fully-diluted, weighted average shares outstanding in the similar period last year.

The net income for the corresponding period of the prior year included a non-recurring charge of $0.1 million related to the early conversion of a portion of the then outstanding 6% Convertible Senior Subordinated Debentures.

Revenues for the nine-month period ended June 30, 1997, were $816.3 million, representing an increase of 77% over revenues of $460.4 million during the corresponding period of fiscal 1996.

For the nine months ended June 30, 1997, net income before an extraordinary item increased 65% to $40.6 million or $1.13 per share on 36.3 million fully-diluted, weighted average shares outstanding, compared with net income, excluding a non-recurring charge, for the nine months ended June 30, 1996 of $24.5 million or 91 cents per share on 29.4 million fully-diluted, weighted average shares outstanding.

The net income for the current period included an extraordinary charge of $0.6 million related to the early retirement of debt. The net income for the corresponding period in the prior year included a non-recurring charge of $1.2 million ($0.8 million net of tax) related to the early conversion of a portion of the then outstanding 6% Convertible Senior Subordinated Debentures.

Increased revenues for the third quarter reflect the continued expansion the Genesis ElderCare(sm) Network through the acquisitions of the former geriatric and medical companies operations beginning Oct. 1996, the former National Health Care Affiliates operations beginning July 1996, NeighborCare Pharmacies beginning May 1996 and increased specialty medical services.

Specialty medical service revenue accounted for 46% of consolidated revenues in the third quarter of 1997, increasing 69% to $132.1 million from $78.3 million in the third quarter of 1996.

Management fees and other revenues increased 42% in the third quarter to $12.3 million compared to $8.6 million during the same period in the prior year. There were no transactional revenues in the current year quarter compared to $2.4 million in the quarter ended June 30, 1996, which included the sale of an investment.

"During the third quarter, Genesis continued to execute its network development strategy focusing on the first phase of our management contract with The Presbyterian Foundation of Philadelphia and the continued integration of three strategic acquisitions made last fiscal year - NeighborCare Pharmacies, National Health Care Affiliates and Geriatric and Medical Companies," commented Michael R. Walker, chairman and chief executive officer.

"We are pleased with the way the integration process is progressing and our results reflect the synergies and cost savings anticipated," Walker noted.

"In the coming months, we plan to further build on the strength of the Genesis ElderCare(sm) Network and launch a host of new community-based services which aimed towards maintaining the health, well being and independent living of our customers," Walker noted.

Genesis Health Ventures is a leader in the healthcare industry and was founded in 1985 to redefine how America cares for the elderly, using a coordinated, comprehensive approach that helps older adults define and live a full life.

The company has established Genesis ElderCare(sm) Networks in five major metropolitan markets in the eastern United States and currently serves more than 100,000 customers. -0-

Certain oral statements made by management from time to time and certain statements contained herein regarding matters that are not historical facts are forward looking statements (as such term is defined in the Securities Act of 1933) and because such statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. -0-

                    GENESIS HEALTH VENTURES, INC.
                        Financial Highlights
                (In thousands, except per share amounts)

                                                Three Months Ended
                                                      June 30,
                                                    (Unaudited)
                                                  1997        1996
                                                  ----        ----

Net revenues                                    $284,463     $172,836
Net income excluding non-recurring debenture
 conversion expense                               15,556       10,189
Net income                                        15,556       10,091
Net income per share, fully diluted                 0.43         0.35
Weighted average shares outstanding               36,388       31,108
-0-
                                                 Nine Months Ended
                                                      June 30,
                                                  1997        1996
                                                  ----        ----
                                                    (Unaudited)


Net revenues                                    $816,270     $460,354
Net income excluding non-recurring debenture
 conversion expense and extraordinary item        40,558       24,544
Net income                                        40,005       23,759
Net income excluding non-recurring debenture
 conversion expense and extraordinary item,
 per share                                          1.13         0.91
Net income per share, fully diluted                 1.11         0.88
Fully-diluted, weighted average shares
 outstanding                                      36,275       29,359

CONTACT: Genesis Health Ventures Inc.

George V. Hager, Jr., Senior V.P. and CEO 

610/444-6350