Gentiva® Health Services Reports Second Quarter 2013 Results

         Gentiva® Health Services Reports Second Quarter 2013 Results

PR Newswire

ATLANTA, Aug. 1, 2013

ATLANTA, Aug.1, 2013 /PRNewswire/ --Gentiva Health Services, Inc. (NASDAQ:
GTIV), the largest provider of home health and hospice services in the United
States based on revenue, today reported second quarter 2013 results.
Quarterly highlights include:

  oNet revenues of $414.4 million.
  oAdjusted income attributable to Gentiva shareholders per diluted share of
    $0.22.
  oAdjusted EBITDA of $39.0 million.
  oFree cash flow of $25.9 million.

Second quarter 2013 financial highlights include:

  oNet revenues of $414.4 million, a decrease of 3% compared to $427.7
    million for the quarter ended June 30, 2012. During the quarter ended
    June 30, 2013, net revenues were negatively impacted by the 2013 home
    health Medicare rate reduction, the full-quarter effect of the 2%
    sequestration rate cut on our Medicare-based revenues and the sale or
    closure of branches in the prior year. Excluding the impact of branches
    sold or closed, net revenues would have been down 2% compared to the
    second quarter of 2012. Net revenues included home health episodic
    revenues of $206.7 million, flat compared to $207.5 million in the 2012
    second quarter. Hospice revenues were $179.2 million, a decrease of 7%
    compared to $192.0 million in the 2012 second quarter. Hospice
    represented 43% of total net revenues in the second quarter of 2013,
    compared to 45% in the 2012 second quarter.
  oIncome attributable to Gentiva shareholders of $6.3 million, or $0.20 per
    diluted share, compared to $13.9 million, or $0.46 per diluted share, for
    the second quarter of 2012.
  oAdjusted income attributable to Gentiva shareholders of $6.8 million,
    compared with $10.7 million in the comparable 2012 period. On a diluted
    per share basis, adjusted income attributable to Gentiva shareholders was
    $0.22 for the second quarter of 2013 as compared to $0.35 for the second
    quarter of 2012.
  oAdjusted earnings before interest, taxes, depreciation and amortization
    (Adjusted EBITDA) was $39.0 million in the second quarter of 2013 as
    compared to $48.3 million in the second quarter of 2012. Adjusted EBITDA
    as a percentage of net revenues was 9.4% in the second quarter of 2013
    versus 11.3% in the prior year period.

Adjusted income attributable to Gentiva shareholders and Adjusted EBITDA
exclude charges related to restructuring, legal settlements, acquisition and
integration activities and other special items.

Highlights for the six months ended June 30, 2013 include:

  oNet revenues of $830.0 million, a decrease of 4% as compared to $863.3
    million for the prior year period. Net revenues included home health
    episodic revenues of $414.1 million, compared to $418.1 million in the
    comparable 2012 period. Hospice revenues were $358.7 million, compared to
    $387.7 million in the comparable 2012 period.
  oLoss attributable to Gentiva shareholders of $200.8 million, or $6.51 per
    diluted share. Income attributable to Gentiva shareholders in the
    comparable 2012 period was $18.7 million, or $0.61 per diluted share.
  oAdjusted income attributable to Gentiva shareholders of $13.9 million,
    compared with $18.1 million in the 2012 period.  On a diluted per share
    basis, adjusted income attributable to Gentiva shareholders was $0.45 as
    compared with $0.59 in the corresponding period of 2012, prior to the
    $0.03 add-back in the first quarter of 2012 for credit agreement amendment
    expenses.
  oAdjusted earnings before interest, taxes, depreciation and amortization
    (Adjusted EBITDA) was $78.1 million as compared to $90.2 million in the
    2012 period. Adjusted EBITDA as a percentage of net revenues was 9.4%
    versus 10.5% in the prior-year period.  

Cash Flow and Balance Sheet Highlights

At June 30, 2013, the Company reported cash and cash equivalents of $185.1
million, up from $159.6 million at March 31, 2013. Total outstanding debt was
$910.2 million as of June 30, 2013. Total Company days sales outstanding,
or DSO, was 52 days at June 30, 2013, flat with the DSO at March 31, 2013.

For the second quarter of 2013, net cash provided by operating activities was
$30.7 million, compared to $83.8 million in the prior year period for 2012,
which included a significant benefit from the reduction of DSO. Free cash
flow was $25.9 million for the second quarter of 2013, compared to $80.7
million in the prior year period. Free cash flow is calculated as net cash
provided by operating activities less capital expenditures.

Full-Year 2013 Outlook

Based on first half 2013 results and the potential fourth quarter 2013 impact
of the proposed 2014 Medicare home health and hospice reimbursement rules, the
Company now expects full-year net revenues to be in the range of $1.67 billion
to $1.70 billion. The Company continues to expect 2013 adjusted income
attributable to Gentiva shareholders to be in the range of $0.90 to $1.10 on a
diluted per share basis.

Non-GAAP Financial Measures

The information provided in this press release includes certain non-GAAP
financial measures as defined under SEC rules. In accordance with SEC rules,
the Company has provided, in the supplemental information and the footnotes to
the tables, a reconciliation of those historical measures to the most directly
comparable GAAP measures.

A reconciliation of adjusted income attributable to Gentiva shareholders to
net income, the most directly comparable GAAP measure, is not accessible on a
forward-looking basis without unreasonable effort due to the inherent
difficulties in predicting the costs of restructuring, legal settlements and
merger and acquisition activities and the impact of any future acquisitions or
divestitures, which can fluctuate significantly and may have a significant
impact on net income.

Conference Call and Webcast Details

The Company will comment further on its second quarter 2013 results during its
conference call and live webcast to be held Thursday, August 1, 2013 at 9:00
a.m. Eastern Time. To participate in the call from the United States, Canada
or an international location, dial (973) 935-2408 and reference call
#17144988. The webcast is an audio-only, one-way event. Webcast listeners who
wish to ask questions must participate in the conference call. Log onto
http://investors.gentiva.com/events.cfmto hear the webcast. A replay of the
call will be available on August 1 and will remain available continuously
through August 8. To listen to a replay of the call from the United States,
Canada or international locations dial (800) 585-8367 or (404) 537-3406 and
enter the following PIN at the prompt: 17144988. Visit
http://investors.gentiva.com/events.cfm to access the webcast archive. This
press release is accessible at http://investors.gentiva.com/releases.cfm and a
transcript of the conference call will be posted on the Company's website.

About Gentiva Health Services, Inc.

Gentiva Health Services, Inc. is the nation's largest provider of home health
and hospice services based on revenue, delivering innovative, high quality
care to patients across the United States. Gentiva is a single source for
skilled nursing; physical, occupational, speech and neurorehabilitation
services; hospice services; social work; nutrition; disease management
education; help with daily living activities; and other therapies and
services. GTIV-G

(unaudited tables and notes follow)

Gentiva Health Services, Inc. and Subsidiaries

Condensed Consolidated Financial Statements and Supplemental Information

(Unaudited)

                                  2nd Quarter           Six Months
(in 000's, except per share data)
                                  2013       2012       2013         2012
Condensed Statements of
Comprehensive Income (Loss)
   Net revenues                   $ 414,424  $ 427,691  $ 830,015    $ 863,343
   Cost of services sold          218,947    222,737    440,520      455,598
   Gross profit                   195,477    204,954    389,495      407,745
   Selling, general and           (161,937)  (163,928)  (321,814)    (337,635)
   administrative expenses
   Gain on sale of businesses     —          5,447      —            5,447
   Goodwill and other long-lived  —          —          (224,320)    —
   asset impairment
   Interest income                642        697        1,427        1,358
   Interest expense and other     (22,790)   (23,352)   (45,868)     (45,515)
   Income (loss) before income    11,392     23,818     (201,080)    31,400
   taxes
   Income tax (expense) benefit   (4,829)    (9,646)    587          (12,175)
   Net income (loss)              6,563      14,172     (200,493)    19,225
   Less: Net income attributable  (216)      (263)      (337)        (476)
   to noncontrolling interests
   Net income (loss) attributable $ 6,347    $ 13,909   $ (200,830)  $ 18,749
   to Gentiva shareholders
   Total comprehensive income     $ 6,563    $ 14,172   $ (200,493)  $ 19,225
   (loss)
  Earnings per Share
   Net income (loss) attributable
   to Gentiva shareholders:
   Basic                          $ 0.21     $ 0.46     $ (6.51)     $ 0.61
   Diluted                        $ 0.20     $ 0.46     $ (6.51)     $ 0.61
   Weighted average shares
   outstanding:
   Basic                          30,941     30,338     30,863       30,532
   Diluted                        31,239     30,446     30,863       30,632





(in 000's)
Condensed Balance Sheets
     ASSETS                          Jun 30, 2013             Dec 31, 2012
         Cash and cash equivalents   $     185,122            $    207,052
         Accounts receivable, net    252,589                  251,080
         (A)
         Deferred tax assets         9,051                    12,263
         Prepaid expenses and other  43,162                   45,632
         current assets
         Total current assets        489,924                  516,027
         Notes receivable from       28,471                   28,471
         CareCentrix
         Fixed assets, net           38,273                   41,414
         Intangible assets, net      191,601                  193,613
         Goodwill                    435,747                  656,364
         Other assets                72,208                   75,045
         Total assets                $     1,256,224          $    1,510,934
     LIABILITIES AND EQUITY
         Current portion of          $     12,500             $    25,000
         long-term debt
         Accounts payable            12,706                   13,445
         Payroll and related taxes   42,069                   45,357
         Deferred revenue            38,063                   37,444
         Medicare liabilities        16,035                   27,122
         Obligations under insurance 57,546                   56,536
         programs
         Accrued nursing home costs  19,866                   18,428
         Other accrued expenses      50,296                   66,567
         Total current liabilities   249,081                  289,899
         Long-term debt              897,682                  910,182
         Deferred tax liabilities,   31,392                   42,165
         net
         Other liabilities           39,015                   33,988
         Total equity                39,054                   234,700
         Total liabilities and       $     1,256,224          $    1,510,934
         equity
         Common shares outstanding   31,315                   30,748
(A) Accounts receivable, net included an allowance for doubtful accounts of
$9.1 million and $8.8 million at June 30, 2013 and December 31, 2012,
respectively.





(in 000's)
                                                       Six Months
Condensed Statements of Cash Flows                     2013          2012
 OPERATING ACTIVITIES:
 Net (loss) income                                     $ (200,493)   $ 19,225
 Adjustments to reconcile net (loss) income to net
 cash provided
  byoperating activities:
  Depreciation and amortization                        9,511         14,722
  Amortization and write-off of debt issuance costs    6,463         7,020
  Provision for doubtful accounts                      2,680         3,746
  Equity-based compensation expense                    3,969         3,442
  Windfall tax benefits associated with equity-based   (82)          —
  compensation
  Gain on sale of businesses                           —             (5,447)
  Goodwill and other long-lived asset impairment       224,320       —
  Deferred income tax (benefit) expense                (7,983)       9,906
 Changes in assets and liabilities, net of effects
 from acquisitions
  anddispositions:
  Accounts receivable                                  (3,919)       26,251
  Prepaid expenses and other current assets            1,727         (7,524)
  Current liabilities                                  (27,705)      (28,314)
 Other, net                                            1,678         6,117
 Net cash provided by operating activities             10,166        49,144
 INVESTING ACTIVITIES:
 Purchase of fixed assets                              (7,521)       (6,941)
 Proceeds from sale of businesses, net of cash         508           6,090
 transferred
 Net cash used in investing activities                 (7,013)       (851)
 FINANCING ACTIVITIES:
 Proceeds from issuance of common stock                1,852         1,640
 Windfall tax benefits associated with equity-based    82            —
 compensation
 Payment of contingent consideration accrued at        (1,500)       —
 acquisition date
 Repayment of long-term debt                           (25,000)      (50,000)
 Repurchase of common stock                            —             (4,974)
 Debt issuance costs                                   —             (4,125)
 Other                                                 (517)         (468)
 Net cash used in financing activities                 (25,083)      (57,927)
 Net change in cash and cash equivalents               (21,930)      (9,634)
 Cash and cash equivalents at beginning of period      207,052       164,912
 Cash and cash equivalents at end of period            $ 185,122     $ 155,278
 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 Interest paid                                         $ 39,069      $ 38,402
 Income taxes paid                                     $ 522         $ 4,014
                                                       Six Months
A reconciliation of Free cash flow to Net cash
provided by                                            2013          2012
 operating activities follows:
  Net cash provided by operating activities            $ 10,166      $ 49,144
  Less: Purchase of fixed assets                       (7,521)       (6,941)
  Free cash flow                                       $ 2,645       $ 42,203



(in 000's)
Supplemental Information          2nd Quarter           Six Months
                                  2013       2012       2013         2012
Segment Information (2)
 Net revenues
       Home Health                $ 235,216  $ 235,687  $ 471,277    $ 475,651
       Hospice                    179,208    192,004    358,738      387,692
 Total net revenues               $ 414,424  $ 427,691  $ 830,015    $ 863,343
 Operating contribution (4)
       Home Health                $ 29,917   $ 36,383   $ 60,105     $ 62,259
       Hospice                    26,437     35,146     53,858       67,628
 Total operating contribution     56,354     71,529     113,963      129,887
 Corporate administrative         (18,084)   (23,211)   (36,771)     (45,055)
 expenses
 Goodwill and other long-lived    —          —          (224,320)    —
 asset impairment (5)
 Depreciation and amortization    (4,730)    (7,292)    (9,511)      (14,722)
 Gain on sale of businesses (6)   —          5,447      —            5,447
 Interest expense and other, net  (22,148)   (22,655)   (44,441)     (44,157)
 (7)
 Income (loss) before income      $ 11,392   $ 23,818   $ (201,080)  $ 31,400
 taxes
 Home Health operating            12.7%      15.4%      12.8%        13.1%
 contribution margin %
 Hospice operating contribution   14.8%      18.3%      15.0%        17.4%
 margin %
                                  2nd Quarter           Six Months
 Net Revenues by Major Payer      2013       2012       2013         2012
 Source:
       Medicare
       Home Health                $ 192,733  $ 186,154  $ 385,853    $ 376,771
       Hospice                    167,788    179,554    335,061      361,553
       Total Medicare             360,521    365,708    720,914      738,324
       Medicaid and local         18,664     18,258     36,934       37,719
       government
       Commercial insurance and
       other:
       Paid at episodic rates     13,974     21,313     28,229       41,287
       Other                      21,265     22,412     43,938       46,013
       Total commercial insurance 35,239     43,725     72,167       87,300
       and other
       Total net revenues         $ 414,424  $ 427,691  $ 830,015    $ 863,343
                                  2nd Quarter           Six Months
A reconciliation of Adjusted
EBITDA to Net income (loss)       2013       2012       2013         2012
attributable to Gentiva
shareholders follows:
 Adjusted EBITDA (3)              $ 39,014   $ 48,343   $ 78,077     $ 90,248
 Cost savings, restructuring,
 legal settlement and acquisition (744)      (25)       (885)        (5,416)
 and integration costs (4)
 Goodwill and other long-lived    —          —          (224,320)    —
 asset impairment (5)
 Gain on sale of businesses (6)   —          5,447      —            5,447
 EBITDA (4)                       38,270     53,765     (147,128)    90,279
 Depreciation and amortization    (4,730)    (7,292)    (9,511)      (14,722)
 Interest expense and other, net  (22,148)   (22,655)   (44,441)     (44,157)
 (7)
 Income (loss) before income      11,392     23,818     (201,080)    31,400
 taxes
 Income tax (expense) benefit (8) (4,829)    (9,646)    587          (12,175)
 Net income (loss)                6,563      14,172     (200,493)    19,225
 Less: Net income attributable to (216)      (263)      (337)        (476)
 noncontrolling interests
 Net income (loss) attributable   $ 6,347    $ 13,909   $ (200,830)  $ 18,749
 to Gentiva shareholders



A reconciliation of Adjusted income attributable to Gentiva shareholders to
Net income (loss) (all items presented are net of tax): (3)

                                      2nd Quarter        Six Months
                                      2013     2012      2013         2012
Adjusted income attributable to       $ 6,799  $ 10,695  $ 13,906     $ 18,140
Gentiva shareholders
Cost savings, restructuring, legal
settlement and acquisition and        (452)    (34)      (538)        (3,215)
integration costs (4)
Goodwill and other long-lived asset   —        —         (214,198)    —
impairment (5)
Gain on sale of businesses (6)        —        3,248     —            3,248
Tax valuation allowance on OIG legal  —        —         —            576
settlement
Income (loss) attributable to Gentiva 6,347    13,909    (200,830)    18,749
shareholders
Add back: Net income attributable to  216      263       337          476
noncontrolling interests
Net income (loss)                     $ 6,563  $ 14,172  $ (200,493)  $ 19,225
Adjusted income attributable to
Gentiva shareholders per diluted      $ 0.22   $ 0.35    $ 0.45       $ 0.59
share
Cost savings, restructuring, legal
settlement and acquisition and        (0.02)   —         (0.02)       (0.11)
integration costs (4)
Goodwill and other long-lived asset   —        —         (6.94)       —
impairment (5)
Gain on sale of businesses (6)        —        0.11      —            0.11
Tax valuation allowance on OIG legal  —        —         —            0.02
settlement
Income (loss) attributable to Gentiva 0.20     0.46      (6.51)       0.61
shareholders per diluted share
Add back: Net income attributable to  0.01     0.01      0.01         0.02
noncontrolling interests
Net income (loss) per diluted share   $ 0.21   $ 0.47    $ (6.50)     $ 0.63
Operating Metrics                     2nd Quarter        Six Months
                                      2013     2012      2013         2012
Home Health
Episodic admissions                   48,300   48,800    98,700       100,200
Total episodes                        71,000   71,400    143,200      144,800
Episodes per admission                1.47     1.46      1.45         1.44
Revenue per episode                   $ 2,910  $ 2,905   $ 2,890      $ 2,890
Hospice
Admissions                            12,100   12,900    25,700       26,700
Average daily census                  12,800   13,700    12,800       13,700
Patient days (in thousands)           1,164    1,243     2,310        2,499
Revenue per patient day               $ 154    $ 154     $ 155        $ 155
Length of stay at discharge (in days) 97       86        98           89
Services by patient type:
Routine                               98%      98%       98%          98%
General Inpatient & Other             2%       2%        2%           2%

Notes:

  1. The comparability between reporting periods has been affected by the
  following items:

  a.The Company completed several acquisitions, closed a significant number
  of branch operations and sold a number of operating units affecting the
  reporting periods presented as follows:

     oDuring the second quarter of 2013, the Company completed the
       acquisition of Hope Hospice.
     oDuring the third quarter of 2012, the Company completed the
       acquisitions of Family Home Care, North Mississippi Hospice and
       Advocate Hospice.
     oDuring the fourth quarter of 2012, the Company sold its Phoenix area
       hospice operations. During the second quarter of 2012, the Company
       sold eight home health branches and four hospice branches in Louisiana.

    During the first quarter of 2012, the Company continued a comprehensive
    review of its branch structure, support infrastructure and other
    significant expenditures in order to reduce its ongoing operating costs
    given the challenging rate environment facing the Company. As a result of
    this effort, the Company closed or divested 4 home health branches and
    completed significant reductions in staffing levels in regional, area and
    corporate support functions.

    As a result of this activity, the Company's revenue for the second quarter
    and first six months of 2013 were negatively impacted by approximately $5
    million and $14 million, respectively, as compared to the second quarter
    and first six months of 2012.

  b.The first six months of 2013 included 181 days of activity as compared to
  182 days for the first six months of 2012 due to 28 days in February 2013
  versus 29 days in February 2012.

  2. The Company's senior management evaluates performance and allocates
  resources based on operating contributions of the operating segments, which
  exclude corporate expenses, depreciation, amortization, and interest expense
  and other (net), but include revenues and all other costs directly
  attributable to the specific segment.

  3.Adjusted EBITDA, a non-GAAP financial measure, is defined as income
  before interest expense and other (net of interest income), income taxes,
  depreciation and amortization and excluding charges relating to (i) cost
  savings and other restructuring, legal settlements, and acquisition and
  integration activities, (ii) gain on sale of businesses and (iii) goodwill
  and other long-lived asset impairment. Management uses Adjusted EBITDA to
  evaluate overall performance and compare current operating results with
  other companies in the healthcare industry. Adjusted EBITDA should not be
  considered in isolation or as a substitute for income from continuing
  operations, net income, operating income or cash flow statement data
  determined in accordance with accounting principles generally accepted in
  the United States. Because Adjusted EBITDA is not a measure of financial
  performance under accounting principles generally accepted in the United
  States and is susceptible to varying calculations, it may not be comparable
  to similarly titled measures in other companies.

  Adjusted income attributable to Gentiva shareholders is defined as income
  attributable to Gentiva shareholders, excluding (i) tax reserves relating to
  the OIG settlement, (ii) gain on sale of businesses, (iii) charges relating
  to cost savings and other restructuring, legal settlements, and acquisition
  and integration activities and (iv) goodwill and other long-lived asset
  impairment.

  4. Operating contribution and EBITDA included charges relating to cost
  savings and other restructuring, legal settlements and acquisition and
  integration activities of $0.8 million and $0.9 million for the second
  quarter and first six months of 2013, respectively. For the first six months
  of 2012, the Company recorded charges of $5.4 million.

  For both the second quarter and first six months of 2013, the Company
  recorded restructuring costs of $0.2 million. For the second quarter and
  first six months of 2013, acquisition and integration activities of $0.6
  million and $0.7 million, respectively, primarily related to the Company's
  acquisition of Hope Hospice, Inc.

  For the first six months of 2012, the Company recorded (i) restructuring
  costs of $1.3 million and (ii) legal settlement reserves of $5.0 million,
  associated with the tentative settlement of the Wilkie wage and hour
  lawsuit, partially offset by a reduction in acquisition and integration
  costs of $0.9 million, primarily relating to favorable lease settlements
  associated with Odyssey HealthCare, Inc.

  These charges were reflected as follows for segment reporting purposes
  (dollars in millions):

                     2nd Quarter          Six Months
                     2013       2012      2013        2012
  Home Health        $     —    $  (0.1)  $      —    $  5.7
  Hospice            0.7        0.3       0.7         0.1
  Corporate expenses 0.1        (0.2)     0.2         (0.4)
  Total              $     0.8  $  —      $      0.9  $  5.4

  5.During the first six months of 2013, the Company recorded non-cash
  charges of $224.3 million related to goodwill and other long-lived assets.

  At March 31, 2013, the Company performed an interim impairment test of its
  Hospice reporting unit due to lower than expected average daily census and
  higher than expected discharge rates during the quarter. Based on the
  results of the interim impairment test, the Company's Hospice reporting unit
  had an estimated fair value of approximately $555 million. As such the
  Company recorded a non-cash impairment charge relating to goodwill of
  approximately $220.8 million. As part of that analysis, the Company reviewed
  the valuation of its owned real estate utilized in the Hospice business. The
  analysis indicated that two of the Company's hospice inpatient units had
  estimated fair values lower than their carrying values and, as such, the
  Company recorded a non-cash impairment charge of approximately $1.9 million.

  In addition, the Company conducted an evaluation of the various systems used
  to support its field operations. In connection with that review, the Company
  made a strategic decision to replace its business intelligence software
  platform and, as such, recorded a non-cash impairment charge, related to
  developed software, of approximately $1.6 million.

  6.During the second quarter of 2012, the Company completed the sale of
  eight home health branches and four hospice branches in Louisiana, pursuant
  to an asset purchase agreement, for total consideration of approximately
  $6.4 million.

  Effective May 31, 2012, the Company completed the sale of its Gentiva
  consulting business to MP Healthcare Partners, LLC pursuant to an asset
  purchase agreement, for cash consideration of approximately $0.3 million. In
  connection with the sales, the Company recorded a gain on sale of businesses
  of approximately $5.4 million for the second quarter and first six months of
  2012.

  7.Interest expense and other, net for the first six months of 2012 included
  charges of approximately $0.5 million relating to the write-off of deferred
  debt issuance costs associated with Amendment No. 3 to the Company's credit
  agreement.

  8.The Company's effective tax rate was a tax provision of 42.4% and a tax
  benefit of 0.3% for the second quarter and first six months of 2013,
  respectively, as compared to a tax provision of 40.5% and 38.8% for the
  second quarter and first six months of 2012, respectively.

  During the first six months of 2013, the Company recorded non-cash
  impairment charges of $224.3 million related to goodwill and other
  long-lived assets (see note 5). Excluding the impact of the impairment
  charges, the Company's effective tax rate would have been 40.6% for the
  first six months of 2013.

  During the first six months of 2012, the Company recorded a favorable tax
  reserve adjustment upon resolution of an uncertain tax position associated
  with the deductibility of a portion of the Company's settlement payment to
  the Office of the Inspector General. Excluding the impact of the favorable
  tax reserve adjustment, the Company's effective tax rate would have been
  40.8% for the first six months of 2012.

Forward-Looking Statements

Certain statements contained in this news release, including, without
limitation, statements containing the words "believes," "anticipates,"
"intends," "expects," "assumes," "trends" and similar expressions, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are based upon the
Company's current plans, expectations and projections about future events.
However, such statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of the Company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. These
factors include, among others, the following: economic and business
conditions; demographic changes; changes in, or failure to comply with,
existing governmental regulations; the impact on our Company of healthcare
reform legislation and its implementation through governmental regulations;
legislative proposals for healthcare reform; changes in Medicare, Medicaid and
commercial payer reimbursement levels; the outcome of any inquiries into the
Company's operations and business practices by governmental authorities;
compliance with any corporate integrity agreement affecting the Company's
operations; effects of competition in the markets in which the Company
operates; liability and other claims asserted against the Company; ability to
attract and retain qualified personnel; ability to access capital markets;
availability and terms of capital; loss of significant contracts or reduction
in revenues associated with major payer sources; ability of customers to pay
for services; business disruption due to natural disasters, pandemic
outbreaks, terrorist acts or cyber-attacks; availability, effectiveness,
stability and security of the Company's information technology systems;
ability to successfully integrate the operations of acquisitions the Company
may make and achieve expected synergies and operational efficiencies within
expected time-frames; ability to maintain compliance with its financial
covenants under the Company's credit agreement; effect on liquidity of the
Company's debt service requirements; and changes in estimates and judgments
associated with critical accounting policies and estimates. For a detailed
discussion of certain of these and other factors that could cause actual
results to differ from those contained in this news release, please refer to
the Company's various filings with the Securities and Exchange Commission,
including the "Risk Factors" section contained in the Company's annual report
on Form 10-K for the year ended December 31, 2012.

Financial and Investor Contact:
Eric Slusser
770-951-6101
eric.slusser@gentiva.com
or
John Mongelli
770-951-6496
john.mongelli@gentiva.com

Media Contact:
Scott Cianciulli
Brainerd Communicators
212-986-6667
cianciulli@braincomm.com

SOURCE Gentiva Health Services, Inc.

Website: http://www.gentiva.com
 
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