PharMerica Reports Results for the Second Quarter 2008 and for the Six Months Ended June 30, 2008

Business Wire, August 7, 2008

LOUISVILLE, Ky. -- PharMerica Corporation (NYSE: PMC), a national provider of institutional pharmacy and hospital pharmacy management services, today reported the results of its second quarter and six months ended June 30, 2008.

PharMerica began trading on the New York Stock Exchange under the symbol "PMC" on August 1, 2007. The Company was created through a combination of the institutional pharmacy and hospital pharmacy management businesses of Kindred Healthcare, Inc. (NYSE: KND) and AmerisourceBergen Corporation (NYSE: ABC) (the "Pharmacy Transaction"). The Company's results of operations for the second quarter and six months ended June 30, 2008, include the combined results of Kindred Pharmacy Services, Inc. ("KPS") and PharMerica Long-Term Care, Inc. ("PharMerica LTC"). The Company's results of operations for the second quarter and six months ended June 30, 2007, reflect the historical results of KPS only.

Management Commentary

In commenting on the Company's results for the second quarter, Gregory S. Weishar, PharMerica Corporation's Chief Executive Officer, said, "We are making great progress. Our employees have responded very positively to the new direction of the Company. We are focused on improving and enhancing our service. Our major initiatives are progressing well. We are over halfway complete with the pharmacy consolidations. Our bad debt has improved considerably, and our command of the operating metrics is improving monthly. We are also focusing on our acquisition program and expect to see opportunities over the next several quarters. Looking forward, we are updating our full year 2008 earnings guidance to a range of $0.74 per share to $0.83 per share."

Second-Quarter and Six Months Ended June 30, 2008 Highlights

* Revenues were $486.3 million for the second quarter and $981.4 million for the six months ended June 30, 2008.

* The increase from second quarter 2007 was the result of the acquisition of PharMerica LTC.

* Revenues declined $8.8 million from the sequential first quarter due to multiple factors, including the increase in the amount of generic drugs prescribed, lower volumes due to the seasonal nature of the industry and a sequential decline in licensed beds.

* Prescriptions dispensed approximated 10.1 million for the second

quarter and 20.3 million for the six months ended June 30, 2008.

* Prescriptions dispensed were basically flat from the sequential first quarter as prescriptions per patient continued to increase despite the sequential reduction in licensed beds.

* Net income was $2.9 million for the second quarter and $6.2 million for the six months ended June 30, 2008.

* Integration, merger related costs and other charges were $6.6 million for the quarter ($3.7 million, net of tax) and $10.7 million ($6.1 million, net of tax) for the six months ended June 30, 2008.

* Over 50% of planned pharmacy consolidations were completed by the end of the second quarter.

* The decline in net income of $0.4 million from the sequential first quarter was due to the $2.5 million ($1.4 million, net of tax) increase in integration, merger related costs and other charges as more consolidations of pharmacies were in process during the second quarter.

* Diluted earnings per share were $0.10 for the second quarter of 2008 and $0.21 for the six months ended June 30, 2008.

* Integration, merger related costs and other charges negatively impacted diluted earnings per share by $0.12 in the second quarter and $0.20 for the six months ended June 30, 2008.

* Diluted earnings per share prior to the integration, merger related costs and other charges were $0.22 for the second quarter compared with $0.19 for the sequential first quarter.

* Adjusted EBITDA was $22.4 million for the second quarter and $43.5 million for the six months ended June 30, 2008.

* Adjusted EBITDA increased $1.3 million from the sequential first quarter.

* Cash flows from operations were $13.0 million in the second quarter and $24.2 million for the six months ended June 30, 2008.

* Cash flows from operations increased $1.8 million from the sequential first quarter.

Outlook for 2008

The Company's updated guidance for 2008, excluding any acquisition activity is as follows:

[TABLE OMITTED]

The fiscal 2008 earnings guidance above does not consider any integration, merger related costs or other charges the Corporation may incur. The integration, merger related costs and other charges are expected to exceed $15.0 million for fiscal year 2008.

Conference Call

Management will hold a conference call to review the financial results for the second quarter on August 8, 2008, at 11:00 a.m. ET. To access the live webcast, visit the Investor Relations section of the Company's website at www.pharmerica.com or go to www.earnings.com. To access a telephonic replay of the call, which will be available one hour after the conclusion of the call through August 22, 2008, please dial 1-888-286-8010 (617-801-6888 if calling from outside the U.S.) and use passcode 43015828.

About PharMerica

PharMerica Corporation is a leading institutional pharmacy services company servicing healthcare facilities in the United States. As of June 30, 2008, PharMerica operated 104 institutional pharmacies in 40 states. PharMerica's customers are institutional healthcare providers, such as nursing centers, assisted living facilities, hospitals and other long-term care providers. The Company also provides pharmacy management services to 86 long-term care hospitals. PharMerica services 97 of the top 100 markets in the United States.