Genesis Health Ventures reports strong second quarter '95 results.

KENNETT SQUARE, Pa.--(BUSINESS WIRE)--May 2, 1995--Genesis Health Ventures, Inc. (NYSE:GHV) today announced results for the second quarter of fiscal year 1995.

Revenues for the second quarter ended March 31, 1995 were $117.0 million, representing an increase of 19% over revenues of $98.6 million during the corresponding period of 1994. Earnings for the second quarter increased 62% to $5.8 million, or $.36 per share on 18.9 million fully-diluted, weighted average shares outstanding, compared with $3.6 million or $.28 per share on 16.6 million fully-diluted, weighted average shares outstanding in the similar period last year.

Revenues for the six-month period ended March 31, 1995 were $228.5 million, representing an increase of 34% over revenues of $170.6 million during the corresponding period of 1994. Earnings before the cumulative effect of a change in accounting principle and an extraordinary charge related to the early retirement of indebtedness for the six-month period ended March 31, 1995 increased 63% to $10.6 million or $.67 per share on 18.9 million fully- diluted, weighted average shares outstanding, compared with $6.5 million or $.51 per share on 15.3 million fully-diluted, weighted average shares outstanding in the similar period last year.

Increased corporate revenues were primarily driven by the continued growth in specialty medical services. Specialty medical service revenue accounted for 35.5% of consolidated revenues in the second quarter, increasing 32% to $41.5 million from $31.4 million in the corresponding period of 1994. In addition, Genesis management fees and other revenues increased 27% in the second quarter to $6.4 million as compared to the similar period in the prior year.

"We are very pleased with the Company's progress and results for the second quarter," commented Michael R. Walker, Genesis chairman and chief executive officer. "We completed several previously-announced, strategic acquisitions which were prudent, financially attractive and accretive to earnings, and most importantly, served to further strengthen the service capability of the Genesis Network in select geographic market regions," he noted.

"Early in the quarter, we announced the acquisition of two physician practices in the southern Delaware/eastern Maryland market which enabled us to sign our first preferred provided contract with a large employer in the region in late February," Walker said.

"In the New England market, the acquisition of Delta Drug, Inc. along with the creation of a Boston pharmacy with Horizon Healthcare, our joint venture partner, allowed us to fortify our existing ancillary capabilities and expand our service area to cover Rhode Island and eastern Massachusetts," he commented.

"Last month, the acquisition of TherapyCare, a highly regarded rehabilitative services company based in the Delaware Valley, will create new opportunities for us to expand contract rehabilitation services to third-party providers as well as mitigate our exposure to imminent changes in Medicare reimbursement for rehabilitation services," Walker concluded.

Genesis Health Ventures, Inc. is a recognized innovator in the delivery of geriatric healthcare. The Company, founded in 1985, develops and manages healthcare networks designed to provide cost effective, outcome-oriented services in select regional markets in the eastern United States. -0-

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

                                      Three Months Ended
                                           March 31,
                                      1995          1994

Net revenues                          $116,953      $ 98,640
Net income                               5,813         3,584
Net income per share, fully diluted       0.36          0.28
Weighted average shares outstanding     18,941        16,592

                                      Six Months Ended
                                           March 31,
                                      1995          1994

Net revenues                          $228,506      $170,553
Earnings before cumulative effect
  of a change in accounting
   principle and extraordinary item     10,623         6,499
Net income                              10,623         6,638
Earnings before cumulative effect
  of a change in accounting
   principle and extraordinary item
    per share, fully diluted              0.67          0.51
Net income per share, fully diluted       0.67          0.52
Weighted average shares outstanding     18,913        15,310

CONTACT: Genesis Health Ventures

George V. Hager Jr., 610/444-6350