Omnicare, Inc. (NYSE:OCR) today detailed the implementation of a portion of its previously announced consolidation efforts and other productivity initiatives to streamline operations, maximize workforce and operating asset utilization, and produce a more cost-efficient, operating infrastructure. These initiatives are expected to be completed in 12 months.

"Omnicare has long been committed to being one of our industry's most efficient providers," said Joel F. Gemunder, Omnicare's President and Chief Executive Officer. "These consolidation and productivity initiatives are primarily related to the overall integration plan for our recently completed acquisition of NeighborCare, Inc. Given the geographic overlap of the NeighborCare and Omnicare pharmacies, substantial opportunities for consolidation exist. While the majority of consolidations will result in NeighborCare pharmacies being folded into Omnicare pharmacies, our review of the location, capacity and operating performance of all pharmacies has also identified certain Omnicare pharmacies for consolidation into NeighborCare locations. Additionally, as part of our evaluation process on how best to integrate our organizations, we also focused broadly on ways to lower operating infrastructure costs to maximize efficiencies and asset utilization and identified opportunities to right-size the business, streamline operations and eliminate redundant assets.

"It should be noted that because these initiatives are an outgrowth of our NeighborCare integration process, these savings are, in large part, already considered in the anticipated synergies from this acquisition of $125 million to $145 million that we have previously discussed," added Gemunder.

These particular consolidation and productivity initiatives, upon completion, are expected to generate approximately $40 million in pretax savings on an annualized basis. These initiatives will require a total restructuring charge of approximately $20 million before taxes which relates solely to the costs associated with the consolidation of Omnicare pharmacies into NeighborCare pharmacies and the other productivity initiatives mentioned above. Approximately $18 million of this pretax restructuring charge will be taken in the quarters ending September 30, 2005 (approximately $9 million pretax) and December 31, 2005 (approximately $9 million pretax). The remaining charge of approximately $2 million will be taken in the first and second quarters of 2006. The restructuring charge primarily includes severance, lease terminations, and the write-off of leasehold improvements.

Gemunder said, "Given the timing of the initiatives described herein, we expect the bulk of these savings to occur in 2006. We anticipate these savings will follow a quarterly ramp-up, with approximately $38 million pretax being recognized during the calendar year."

This portion of the consolidation activity and the other productivity initiatives described herein are expected to result in the closure of 17 facilities, of which 15 are pharmacy operations. It will also lead to a net reduction in force of approximately 730 positions, or about 3.7% of Omnicare's total workforce which numbered nearly 20,000 on August 31, 2005. Of this reduction in force, approximately 93% are in pharmacy operations and the remainder are in corporate headquarters or the Company's contract research operations. Employees whose positions are eliminated will be offered appropriate severance benefits.

"Generating economies of scale and other cost-efficiencies have long been an integral part of our ongoing business strategy. With the mounting cost pressures and sweeping change that characterize the healthcare industry, it is as important as ever to remain vigilant in seeking ways to deliver service to our customers and payors cost effectively," said Gemunder. "It is incumbent upon us as an organization to undertake initiatives such as this in order to realize the benefits and strengths of our business platform to maintain our industry leading position, to maximize our financial strength and to capitalize on the growth opportunities inherent in the underlying fundamentals of our business and our sound business strategy."

About Omnicare, Inc.

Omnicare, Inc. (NYSE:OCR), a Fortune 500 company based in Covington, Kentucky, is a leading provider of pharmaceutical care for the elderly. Omnicare serves residents in long-term care facilities comprising approximately 1,400,000 beds in 47 states, the District of Columbia and Canada. Omnicare is the largest U.S. provider of professional pharmacy, related consulting and data management services for skilled nursing, assisted living and other institutional healthcare providers as well as for hospice patients in homecare and other settings. Omnicare also provides distribution and patient assistance services for specialty pharmaceuticals and offers clinical research services for the pharmaceutical and biotechnology industries in 30 countries worldwide.

Forward Looking Statements

Statements in this press release concerning Omnicare's business outlook or future economic performance, including savings and other benefits expected to result from Omnicare's consolidation efforts and other productivity initiatives, anticipated profitability, revenues, expenses or other financial items, together with other statements that are not historical facts, are forward-looking statements that are estimates reflecting the best judgment of Omnicare based on currently available information. Such forward-looking statements involve actual known and unknown risks, uncertainties, contingencies and other factors that could cause actual results, performance or achievements to differ materially from those stated. Such risks, uncertainties, contingencies and other factors, many of which are beyond the control of Omnicare, include, but are not limited to, overall economic, financial and business conditions; trends for the continued growth of the business of Omnicare; trends in the long-term healthcare industry generally; the impact of the NeighborCare acquisition on Omnicare's earnings and the ability to implement Omnicare's consolidation efforts and other productivity initiatives and to realize anticipated benefits; and other risks and uncertainties described in Omnicare's reports and filings with the Securities and Exchange Commission. There can be no assurance that such factors will not affect the accuracy of such forward-looking statements and, except as otherwise required by law, Omnicare does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or to update the information in this release.

For more information on Omnicare, Inc., visit www.omnicare.com.

CONTACT: Omnicare, Inc.
Cheryl D. Hodges, 859-392-3331

SOURCE: Omnicare, Inc.