Genesis Health Ventures, Kennett Square, Pa., said it has reached agreements to sell all of its Florida facilities and announced first-quarter earnings substantially below the year-ago period. The nursing home chain signed a letter of intent with Formation Capital to sell nine skilled-nursing facilities and transfer leasehold rights to one home and one assisted-living facility for about $26.8 million. Separately, Genesis signed an $8.5 million sales agreement with Proformance Senior Living Management for its four remaining assisted-living facilities in Florida. Company CEO Robert Fish said Genesis' liability insurance costs are ten times higher in Florida than in other states and it "may be some time before reform meaningfully reduces insurance costs in the state." Meanwhile, Genesis is continuing to explore strategic options, including the sale or spinoff of its nursing homes. The company said net income for its first quarter ended Dec. 31 fell 24% to $11.9 million, or 29 cents per share, primarily because of discontinued operations and reduced Medicare payments. Revenue grew 5.3% to $669.5 million, led by Genesis' institutional pharmacy business NeighborCare.
Also in the post-acute industry, Select Medical Corp., Mechanicsburg, Pa., said its net income for 2002, its second year as a public company, increased 49% to $44.2 million, or 90 cents per share, while revenue rose 17.5% to $1.1 billion. The company opened eight long-term, acute-care hospitals in 2002, bringing its total to 72. It also operates 737 rehabilitation clinics in North America. -- by Julie Piotrowski