UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 4, 2003
GENESIS HEALTH VENTURES, INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 0-33217 06-1132947
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
101 East State Street,
Kennett Square, Pennsylvania 19348
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610) 444-6350
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Not Applicable
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(Former name or former address, if changed since last report)
Item 7. Exhibits
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(c) Exhibits:
99.1 Earnings release issued by Genesis Health Ventures, Inc.
on August 4, 2003.
Item 9. Regulation FD Disclosure
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On August 4, 2003, Genesis Health Ventures, Inc. and subsidiaires
(Genesis) reported its results for the three and nine months ended June 30,
2003. The earnings release is attached hereto as Exhibit 99.1.
Item 12. Results of Operations and Financial Condition
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The earnings release includes EBITDA, Adjusted EBITDA, Adjusted Net
Income and Adjusted Income from Continuing Operations which are non-GAAP
financial measures. For purposes of SEC Regulation G, a non-GAAP financial
measure is a numerical measure of a registrant's historical or future financial
performance, financial position or cash flows that excludes amounts, or is
subject to adjustments that have the effect of excluding amounts, that are
included in the most directly comparable financial measure calculated and
presented in accordance with GAAP in the statement of operations, balance sheet
or statement of cash flows (or equivalent statements) of the registrant; or
includes amounts, or is subject to adjustments that have the effect of including
amounts, that are excluded from the most directly comparable financial measure
so calculated and presented. In this regard, GAAP refers to generally accepted
accounting principles in the United States of America. Pursuant to the
requirements of Regulation G, Genesis has provided reconciliations of the
non-GAAP financial measures to the most directly comparable GAAP financial
measures.
Genesis' management believes that the presentation of EBITDA provides
useful information to investors regarding its results of operations because they
are useful for trending, analyzing and benchmarking the performance and value of
its business as well as for evaluating its capacity to incur and service debt,
fund capital expenditures and expand its business. Genesis uses each EBITDA
primarily as a performance measure, and believe that the GAAP financial measure
most directly comparable to EBITDA is net income. Genesis also uses EBITDA in
its annual budget process. Genesis believes EBITDA facilitates internal
comparisons to historical operating performance of prior periods and external
comparisons to competitors' historical operating performance. Although Genesis
uses EBITDA as a financial measure to assess the performance of its business,
the use of EBITDA is limited because it does not consider certain material costs
necessary to operate its business. These costs include the cost to service its
debt, the non-cash depreciation and amortization associated with its long-lived
assets, the cost of its federal and state tax obligations, its share of the
earnings or losses of its less than 100% owned operations and the operating
results of its discontinued businesses. Because EBITDA does not consider these
important elements of its cost structure, a user of Genesis' financial
information who relies on EBITDA as the only measure of Genesis' performance or
financial condition could draw an incomplete or misleading conclusion regarding
its financial performance or condition. Consequently, a user of Genesis'
financial information should consider net income an important measure of its
financial performance because it provides the most complete measure of such
performance.
Genesis defines EBITDA as earnings from continuing operations before
interest, taxes, depreciation and amortization. Other companies may define
EBITDA differently and, as a result, Genesis' measure of EBITDA may not be
directly comparable to EBITDA of other companies. EBITDA does not represent net
income or cash flow from operations, as defined by GAAP.
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The non-GAAP financial measures presented in the earnings release and
labled "as adjusted" or "adjusted" exclude certain gains related to one time
transactional events or settlements, exclude costs incurred in connection with
certain strategic planning initiatives associated with Genesis' transformation
to a pharmacy based business and exclude certain tax related gains.
Specifically, during the current and prior year periods, Genesis recognized
costs associated with the spin-off of its eldercare operations and the
transformation of Genesis to a pharmacy-based business. In the prior year
quarter and nine months ended June 30, 2002, Genesis recognized debt
restructuring and reorganization costs. Also during these periods, Genesis
recognized several significant one-time gains. During the nine months ended June
30, 2003, Genesis realized gains, principally from a break-up fee associated
with an attempted pharmacy acquisition. During the three and nine months ended
June 30, 2002, Genesis realized gains associated with an arbitration award.
During the three and nine months ended June 30, 2003 and 2002, Genesis realized
reductions of income tax expense due to changes in the tax law.
These non-GAAP measures, including adjusted EBITDA, adjusted income
from continuing operations, and adjusted net income are presented because
Genesis' management uses this information, which excludes certain expenses and
gains, in evaluating its ongoing operations. Management believes that this
information provides investors a valuable insight into its operating results.
Management also believes that excluding such expenses and gains provides better
comparability to prior year results.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENESIS HEALTH VENTURES, INC.
Date: August 5, 2003 By: George V. Hager, Jr.
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George V. Hager, Jr.
Executive Vice President and
Chief Financial Officer
Exhibit Index
Exhibit No. Description
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99.1 Earnings release issued by Genesis Health Ventures,
Inc. on August 4, 2003.
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