Melville, N.Y., August 5, 2003—Gentiva Health Services, Inc. (NASDAQ: GTIV), the nation's largest provider of home health services, today announced second quarter 2003 financial results marked by a 6.6% increase in net revenues from the second quarter of 2002, diluted earnings per share (EPS) of $0.19 and a strong balance sheet with quarter-end cash items and short-term investments of nearly $102 million.

Net revenues for the quarter ended June 29, 2003 were $208.4 million compared to $195.6 million from continuing operations reported in the second quarter of 2002. Each major payor group -- Medicare, Medicaid and other government, and commercial insurance and other - contributed to the revenue growth, with commercial insurance representing the largest increase - 9% -- due in part to the impact of contracts signed in early 2003.

Net income for the second quarter of 2003 was $5.2 million, or $0.19 per diluted share, compared to net income of $151.3 million, or $5.79 per share, for the corresponding period of 2002. The second quarter 2002 results included income from discontinued operations of $185.0 million, or $7.08 per diluted share, related to both the operating results of Gentiva's Specialty Pharmaceutical Services (SPS) business and the gain on its June 2002 sale, net of related transaction costs and income taxes. Excluding these discontinued operations, the Company's reported net loss for the second quarter of 2002 was $33.7 million, or $1.29 per diluted share, including restructuring and special charges (see Note 3 below), and net of an income tax benefit of $12.3 million.

For the six months ended June 29, 2003, net revenues were $410.5 million, up 5.7% from the $388.4 million reported in the corresponding period of 2002. Net income for the first six months of 2003 was $10.4 million, or $0.38 per diluted share, compared with a loss of $57.9 million, or $2.23 per share, for the corresponding period of 2002. Excluding the aforementioned discontinued operations and the cumulative effect of the accounting change relating to goodwill in 2002, the net loss from continuing operations for the first six months of 2002 was $59.6 million, or $2.29 per diluted share, including restructuring and special charges. (See Note 3 below.)

"The second quarter and first six months of 2003 were marked by revenue growth, and improvements in gross margin and net income, as we moved ahead with a number of initiatives capitalizing on opportunities in home health care," said Chairman and CEO Ron Malone, who cited these examples:

• Expanding Gentiva's Nursing sales force over the past year to focus on revenue generation through more contacts with physicians, case managers and discharge planners;
• Implementing recent Gentiva's CareCentrix® managed care contracts in a continuing drive to help more managed care organizations improve patient care, satisfy their members and control costs;
• Advancing initiatives leading to deployment of new proprietary software and handheld devices to boost efficiencies and enhance patient care;
• Strengthening caregiver recruitment and retention, including the recent launch of new health benefits programs for caregivers; and
• Advocating Medicare reform legislation favorable to elderly patients and industry efforts to bring high quality care to Medicare recipients.

"Beginning in late May," he added, "Gentiva went into the open market to repurchase shares of its common stock, as we said we would do following our Board's authorization announced on May 16, 2003. As of June 29, 2003, we spent nearly $8 million to repurchase over 871,000 shares of common stock. The entire one million stock repurchase program was completed in July at an average price of $9.08 per common share, or a total cost of approximately $9.1 million. We are continually evaluating uses of cash, including additional stock repurchases, dividends, and selective acquisitions to expand service offerings and strengthen our already broad geographic network."

The Company reaffirmed its revenue guidance for the 2003 fiscal year in a range of $800 to $820 million, and raised its earnings guidance to a range of $0.69 to $0.74 per diluted share (versus the prior range of $0.67 to $0.73), which reflects the reduction in common shares outstanding following completion of the stock repurchase program, as well as seasonal softness in demand for home care services during the fiscal third quarter.

Non-GAAP Financial Measures
The information provided in the following tables includes certain non-GAAP financial measures as defined under Securities and Exchange Commission (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 measures to the most directly comparable GAAP measures.

Conference Call and Web Cast Details
The Company will comment further on its second quarter 2003 results, as well as earnings and revenue guidance during its quarterly conference call and live web cast. The conference call and web cast will be held this morning, August 5, 2003, at 10:00 a.m. Eastern Daylight Time. To participate in the call from the United States or Canada, dial: (612) 326-0027. The web cast is an audio only, one-way event. Web cast listeners who wish to ask questions must participate in the conference call. To hear the web cast, log onto http://www.gentiva.com/investor/events.asp. This press release is also accessible at the same link, and a transcript of the conference call will be available on the site within 24 hours after the call.

About Gentiva Health Services
Gentiva Health Services (NASDAQ: GTIV) is the nation's largest home health services provider. Gentiva serves patients through more than 350 direct service delivery units and through CareCentrix®, which manages home health care services for many major managed care organizations throughout the United States. The Company is a single source for skilled nursing; physical, occupational, speech and neuro-rehabilitation services; social work; nutrition; disease management education and help with daily living activities, as well as other therapies and services. The Company brings home health care services to approximately half a million patients each year. 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. Although Income from Continuing Operations - Pro Forma is a non-GAAP financial measure, management believes that the presentation of income from continuing operations as calculated using an effective tax rate of 39% and excluding restructuring and special charges is a useful adjunct to Income (Loss) from Continuing Operations - As Reported under GAAP because it measures the Company's performance in a consistent manner between the results for the second quarter and first six months of fiscal 2003 and fiscal 2002. In addition, Income from Continuing Operations - Pro Forma facilitates comparison between Gentiva and other companies. Furthermore, due to the unusual historical relationship between income tax expense and income before income taxes from continuing operations as described in Note 2, the presentation of Income from Continuing Operations - Pro Forma incorporates an effective tax rate, which may be more representative of the Company's normalized rate. Management also believes that the restructuring and special charges recorded in the second quarter of fiscal 2002 should be excluded from Income from Continuing Operations - Pro Forma, as these costs represent non-recurring charges associated with business realignment activities related to the sale of the SPS business and other costs described in Note 3. For these reasons, management believes that Income from Continuing Operations - Pro Forma is useful to investors. Investors should not view Income from Continuing Operations - Pro Forma as an alternative to the GAAP measure of Income (Loss) from Continuing Operations.
   
   
2. For the second quarter and first six months of 2003, income tax expense approximated $0.4 million and $1.1 million, respectively, representing effective tax rates of 7.8% and 9.2%, respectively. The estimated income tax expense was comprised of state income and federal alternative minimum taxes. The effective tax rates were lower than the statutory tax rate due to the reversal of a portion of the valuation allowance relating to the realization of tax benefits associated with a net operating loss carry forward and other net deferred tax assets. During the first six months of 2002, income tax expense relating to continuing operations was $14.7 million. The estimated income tax expense includes a provision of $26.9 million that was recorded in the first quarter of fiscal 2002 to establish a valuation allowance against certain deferred tax assets that were recorded with the adoption of FAS No. 142 and the subsequent write-off of goodwill; the corresponding tax benefit for the same amount was recorded in the cumulative effect of accounting change line during the 2002 period.
   
   
3. Restructuring and special charges recorded by Gentiva during the second quarter and first six months of 2002 aggregated $46.1 million, of which $6.3 million was recorded in cost of services sold and $39.8 million was recorded in selling, general and administrative expenses. These charges consisted primarily of restructuring charges relating to severance and lease payments associated with the realignment and consolidation of business activities of $6.8 million; cash payments and related expenses in connection with the Company's tender offer to purchase and cancel outstanding stock options of $21.4 million; settlement costs of $7.7 million; a refinement of the estimation process associated with the Company's actuarially determined workers' compensation and professional liability insurance reserves of $6.3 million; and, asset writedowns and the write-off of deferred debt issuance costs associated with the terminated credit facility of $3.8 million.
   
   
4. The computations of diluted earnings per share for the Company's Income from Continuing Operations - Pro Forma for the second quarter and first six months of 2002 include the effect of an incremental 1,226,000 shares and 1,304,000 shares, respectively, that would be issuable upon the assumed exercise of stock options under the treasury stock method. For purposes of the computation of diluted earnings (loss) per share for the Company's Income (Loss) from Continuing Operations - As Reported for 2002, these incremental shares were excluded, since their inclusion would be antidilutive on earnings.