Genesis Health Ventures, Kennett Square, Pa., earned $70.1 million on revenue of $2.6 billion for its fiscal 2002 ended Sept. 30, less than one-third of its fiscal 2001 earnings of $247 million. The long-term-care company emerged from bankruptcy in October 2001. Genesis said certain Medicare policy changes could reduce its annual revenue by $28 million, and during the fourth quarter, it completed a plan to reduce costs by $16 million annually. Genesis also has engaged UBS Warburg and Goldman Sachs & Co. to explore "strategic business alternatives," including a potential sale or spinoff of the company's ElderCare division, which operates roughly 300 skilled-nursing and assisted-living centers facilities. Genesis' NeighborCare division provides pharmacy and medical supply services.
Genesis said it expects to complete its $31.3 million acquisition of long-term-care pharmacy provider NCS HealthCare, Cleveland, on or around Dec. 12. The company overcame a major obstacle last week when Delaware Chancery Court denied a motion for a preliminary injunction against the deal and rejected a claim that the NCS board had breached its fiduciary duties. NCS signed the deal with Genesis despite an alternative offer from NCS rival, OmniCare, Covington, Ky. NCS did not abandon its agreement with Genesis but subsequently withdrew its recommendation that shareholders accept the Genesis offer when OmniCare "irrevocably committed itself" to a higher price. OmniCare's appeal of the Chancery Court's ruling will be heard Dec. 3 in Delaware Supreme Court. In addition, NCS shareholders involved in the suit plan to seek "an expedited appeal," OmniCare said. -- by Julie Piotrowski