Melville, N.Y., February 11, 2003—Gentiva Health Services, Inc. (Nasdaq: GTIV), the nation's leading provider of home health services, today announced its fourth quarter and year end 2002 financial results, highlighted by diluted earnings per share (EPS) from continuing operations of $0.12, net income of $0.19 per diluted share and continued revenue growth during the fourth quarter, net revenues of $768.5 million for the year 2002 and a year-end cash balance of $101 million with no debt.

Net revenues for the quarter grew to $191.6 million, compared with $188.8 million on a continuing operations basis for the fourth quarter of 2001. Fiscal 2002 net revenues from continuing operations were $768.5 million, up 5.3% from net revenues of $729.6 million in the corresponding period in 2001. Revenue growth for the year was fueled by increases in business with insurance companies and the federal Medicare program.

The quarter's performance was driven by a combination of growth in net revenues and gross profit and a reduction in field and corporate administration expenses. For the fourth quarter of 2002, income from continuing operations was $3.3 million or $0.12 per share compared to a loss of $6.7 million, or $0.26 per share, for the corresponding period of 2001. Total company net income was $5.3 million or $0.19 per diluted share in the fourth quarter of 2002, including a tax benefit of $2.0 million or $0.07 per diluted share associated with tax deductible goodwill. This compares to net income of $6.3 million or $0.25 per diluted share in the fourth quarter of 2001, which included income from discontinued operations, net of tax, of $13.0 million or $0.51 per share.

The results for fiscal 2002 reflect a net loss of $49 million or $1.87 per share, consisting of a loss from continuing operations, including restructuring and special charges, of $53.5 million, income from discontinued operations of $191.6 million and a net charge of $187.1 million representing the cumulative effect of the accounting change for goodwill. The Company recorded net income of $21.0 million or $0.90 per share for 2001, including income from discontinued operations of $43.2 million or $1.86 per share.

Discontinued operations include the operating results of the Specialty Pharmaceutical Services (SPS) business together with the net gain on the sale of this business, which was sold to Accredo Health, Incorporated on June 13, 2002. The cumulative effect of the accounting change, which reflects the net write-off of substantially all of the Company's goodwill, represents the non-cash charge resulting from the adoption of FAS 142 (Goodwill and Other Intangible Assets) during the first quarter of 2002.

"As we look at our second full quarter of operations as a stand-alone home health company, we think it's clear that our focus and direction are paying off," commented Ron Malone, chairman and chief executive officer of Gentiva Health Services. "We continue to demonstrate growth in both revenue and earnings. We achieved our corporate overhead target by reducing expenses by more than $10 million from the annualized rate of $53 million during the first half of 2002. DSO was down to 59 days at year end 2002, compared to 68 days at year end 2001. We continue to focus on improving efficiencies in our business through further use of technology and streamlining our processes. We are also investing in our greatest asset-our associates-by providing them with improved tools and resources to make their jobs easier, more efficient and more satisfying."

The Company also reaffirmed its revenue guidance for 2003 in a range of $800 to $820 million. In addition, the Company announced that it projects its effective tax rate for 2003 to be between 10% and 15% of pre-tax income. As a result, the Company is adjusting its 2003 earnings per share guidance from a range of $0.45 to $0.50 per diluted share using a 39% effective tax rate to a range of $0.63 to $0.73 per diluted share using the projected effective tax rate.

Conference Call and Webcast Details

The Company will comment further on its fourth quarter and year end operating results and its 2003 earnings and revenue guidance in its previously announced quarterly conference call and live webcast. The conference call and webcast will be held this morning, February 11, 2003, at 10:00 a.m. Eastern Standard Time. To participate in the call from the United States or Canada, dial: (612) 326-1003. The webcast is an audio only, one-way event. Listeners of the webcast who may have questions must phone into the conference call. To hear the webcast, log onto http://www.gentiva.com/investor/events.asp.

Gentiva Health Services (Nasdaq: GTIV) is the nation's leading home health services provider. By serving patients directly and through CareCentrix, its managed care operation, the Company is a single source for skilled nursing, rehabilitation services and help with daily living activities, as well as other therapies and services. Gentiva's revenues are generated from commercial insurance, federal and state government programs and individual consumers. For more information, visit Gentiva's web site, www.gentiva.com.

Notes:

1. Home Health operating contribution before restructuring and special charges represents income before net interest income (expense), income taxes, depreciation and amortization, corporate expenses and special charges.
   
   
2. Corporate expenses represent costs associated with administrative back office and support functions such as executive office, accounting and finance, human resources, marketing and communications, legal, information technology, clinical support and procurement.
   
   
3. EBITDA before special charges represents earnings before net interest income (expense), income taxes, depreciation and amortization, and special charges.
   
   
4. Restructuring and special charges for 2002 and 2001 are reflected in selling, general and administrative expenses in the consolidated statement of operations, except for special charges associated with insurance costs which are reflected in cost of services sold.
   
   
5. Business realignment charges represents costs related to the closing and consolidation of seven field locations and the realignment and consolidation of certain corporate and administrative support functions due primarily to the sale of the Company’s Specialty Pharmaceutical Services business to Accredo Health, Incorporated on June 13, 2002