Beverly Enterprises 8-K Regulation FD Disclosure

EXHIBIT 99.2

NEWS RELEASE

Investor	James M. Griffith	News Media	Blair C. Jackson
Contact:	Senior Vice President	Contact:	Vice President
	Investor Relations		Corporate Communications
	(479) 201-5514		(479) 201-5263

Strong First-Quarter Operating Results Generate
Continuing Operations EPS Totaling 18 Cents;
EBITDA Guidance for 2004 Raised to $175 — $180 Million

(FORT SMITH, ARKANSAS, May 4, 2004) — Beverly Enterprises, Inc. (NYSE: BEV) today announced that double-digit revenue growth and a significant improvement in operating margins resulted in net income totaling $23.4 million for the first quarter of 2004 (22 cents per share diluted), compared to $12.2 million (12 cents per share diluted) in the same period of 2003.

“During the past three years, we’ve taken aggressive actions as part of the turnaround of Beverly Enterprises to improve quality of care, upgrade our skilled nursing facility portfolio, grow our service businesses, increase operating efficiencies and strengthen our financial position,” said William R. Floyd, Chairman and Chief Executive Officer. “The results of these actions are clearly reflected in our strong first-quarter performance, and the fundamental improvements we’ve already achieved provide even greater confidence in our ability to achieve substantial gains throughout 2004. Because of the solid operating momentum we’ve generated, we are raising our 2004 targeted EBITDA (earnings before interest, taxes, depreciation and amortization) range from continuing operations to $175 million to $180 million.”

Continuing operations achieved net income of $19.6 million (18 cents per share diluted) in the 2004 period, compared to $157,000 in the year-earlier period. Charges for asset impairments, workforce reductions and other unusual items during the first quarters of 2004 and 2003 totaled $4.1 million and $1.2 million, respectively. Net income and earnings per share continue to benefit from a low Federal tax rate.

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Discontinued operations contributed $3.8 million in net income (4 cents per share diluted) in the 2004 first quarter, primarily reflecting net gains on the dispositions of Skilled Nursing Facilities. In the first quarter of 2003, discontinued operations accounted for net income totaling $12 million (12 cents per share diluted), primarily reflecting a gain on the January 2003 sale of outpatient clinics operated by our former MATRIX Rehabilitation business unit.

Revenues for the 2004 first quarter totaled $527.4 million, up 10.7 percent from the year-earlier period. (Revenues for both quarters have been adjusted to exclude discontinued operations.) The revenue gain primarily reflects higher per diem rates, increased occupancy levels and a higher percentage of Medicare patients in Skilled Nursing Facilities, as well as the substantial growth of Beverly’s service businesses – Aegis Therapies and Hospice.

Higher EBITDA Margin Reflects Operating Gains

“Our three principal business units – Skilled Nursing Facilities, Aegis Therapies and Hospice – each achieved significant increases in EBITDA, compared with the year-earlier period,” Floyd added. “Double-digit revenue growth, coupled with an intense focus on cost-reduction initiatives, generated significant operating gains and resulted in an increase in our overall EBITDA margin to nine percent. That’s a gain of 256 basis points from the first quarter of 2003 and 78 basis points from the fourth quarter. An important contributor to this higher margin is the labor management system we implemented late last year. It has proven particularly effective in enabling us to more efficiently address staffing requirements throughout our Skilled Nursing operations, while continuing to improve quality of care. This new system was a key reason for the lower-than-anticipated increase of less than 3.5 percent in our weighted average wage rate, compared to the year-earlier period.”

Skilled Nursing Rates, Occupancy and Patient Mix Increase

On a continuing operations basis, Skilled Nursing Facility revenues rose 8.1 percent from the first quarter of 2003, primarily due to an 8 percent increase in the overall per diem rate, a 43 basis-point increase in average occupancy levels and a 62 basis-point improvement in Medicare patients as a percentage of total patient days. Revenue gains and greater efficiency in managing labor costs resulted in an increase in EBITDA of 42 percent and an increase in EBITDA margins of 170 basis points.

Medicare mix rose to 12.5 percent in the 2004 first quarter – the 17th consecutive quarter of year-over-year increases and the highest share of Medicare patients since 1998. Compared with the 2003 first quarter, Medicare average per diem rates

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increased 9.1 percent, Medicaid rates rose 6.3 percent (6 percent net of the cost of provider taxes) and private/managed care rates were up 3.2 percent.

Strategic Divestitures Continue on Target

Five facilities were divested during the quarter – two sales, two lease terminations and one closure. As part of a strategy to strengthen and streamline its nursing facility portfolio, Beverly has sold or closed 89 under-performing or non-strategic facilities since the 2003 first quarter.

Service Businesses Achieved Double-Digit Profitable Growth

Aegis Therapies achieved another quarter of profitable growth. Revenues from third-party clients were up 70 percent from the 2003 first quarter, reflecting significant business expansion among existing customers and the net addition of 37 new customers during the period. Aegis now provides speech, occupational and physical therapy services to 547 outside customers, as well as to Beverly’s skilled nursing facilities. The annualized total revenue run-rate for Aegis at year-end 2004 is expected to exceed $270 million, including $120 million from outside customers.

Hospice operations again achieved double-digit revenue and EBITDA gains during the 2004 first quarter, compared to the year-earlier period. Revenues were up 28 percent and EBITDA was up more than 40 percent, resulting in an increase in Hospice margins of more than 200 basis points. Daily census averaged 984 patients, an increase of 24 percent from the first quarter of 2003.

Beverly shareholders may listen to a discussion by senior management of the company’s performance at 8:30 a.m. EDT, May 5 by dialing 1-800-946-0783 or 1-719-457-2658 and entering reservation number 571924. A recording of this conference call will be available from 11:30 a.m. EDT, May 5 until midnight Friday, May 14. Shareholders may dial 1-888-203-1112 or 1-719-457-0820 and enter reservation number 571924 to access the recording.

This release is intended to be disclosure through methods reasonably designed to provide broad, non-exclusionary distribution to the public in compliance with the Securities and Exchange Commission’s Fair Disclosure Regulation. This release may contain forward-looking statements, including statements related to performance in 2004 and beyond, made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties that may cause the company’s actual results in future periods to differ materially from forecasted results. These risks and uncertainties include: national and local economic conditions, including their effect on the availability and cost of labor, utilities and materials; the effect of

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government regulations and changes in regulations governing the healthcare industry, including the company’s compliance with such regulations; changes in Medicare and Medicaid payment levels and methodologies and the application of such methodologies by the government and its fiscal intermediaries; the effects of adopting new accounting standards; liabilities and other claims asserted against the company, including patient care liabilities, as well as the resolution of lawsuits brought about by the announcement or settlement of government investigations and increases in the reserves for patient care liabilities; the ability to predict future reserves related to patient care and workers’ compensation liabilities; our ability to obtain adequate insurance coverage with financially viable insurance carriers, as well as the ability of our insurance carriers to fulfill their obligations; the ability to replace or refinance debt obligations; the ability to reduce overhead costs, obtain pricing concessions from suppliers, improve the effectiveness of our fundamental business processes and develop new sources of profitable revenues; the ability to execute our strategic growth initiatives and implement our strategy to divest certain of our nursing facilities in a timely manner at fair values; the ability to attract and retain qualified personnel; the availability and terms of capital to fund acquisitions, capital improvements and on-going operations; the competitive environment in which the company operates; the ability to repurchase our stock and changes in the stock price after any such repurchases; the ability to maintain and increase census levels; and demographic changes. These and other risks and uncertainties that could affect future results are addressed in the company’s filings with the Securities and Exchange Commission, including Forms 10-K and 10-Q.

Beverly Enterprises, Inc. and its operating subsidiaries are leading providers of healthcare services to the elderly in the United States. At March 31, 2004, we operated 368 skilled nursing facilities, as well as 20 assisted living centers, and 24 hospice centers. Through Aegis Therapies, we also offer rehabilitative services on a contract basis to nursing facilities operated by other care providers.

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BEVERLY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

	Quarter ended
	March 31,
	2004			2003
Revenues	$	527,420		$	476,233
Costs and expenses:
Wages and related		299,241			286,063
Provision for insurance and related items		33,729			28,262
Other operating and administrative		143,166			130,052
Depreciation and amortization		15,655			14,159
Asset impairments, workforce reductions and other unusual items		4,082			1,187
Total costs and expenses		495,873			459,723
Income before other income (expenses)		31,547			16,510
Other income (expenses):
Interest expense		(11,893	)		(16,135	)
Interest income		1,374			1,212
Net gains (losses) on dispositions		37			(194	)
Total other expenses, net		(10,482	)		(15,117	)
Income before provision for income taxes and discontinued operations		21,065			1,393
Provision for income taxes		1,442			1,236
Income before discontinued operations		19,623			157
Discontinued operations, net of taxes: 2004 - $423 and 2003 - $0		3,816			12,031
Net income	$	23,439		$	12,188
Net income per share of common stock:
Basic and diluted:
Before discontinued operations	$	0.18		$	—
Discontinued operations		0.04			0.12
Net income per share of common stock	$	0.22		$	0.12
Shares used to compute basic net income per share		107,301			104,743
Shares used to compute diluted net income per share		108,426			104,743

BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

	March 31,			December 31,
	2004			2003
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	230,227	(a)	$	258,815
Accounts receivable, less allowance for doubtful accounts: 2004 - $33,036; 2003 - $31,615		218,239	(a)		164,635
Notes receivable, less allowance for doubtful notes: 2004 - $2,045; 2003 - $3,336		6,533			13,724
Operating supplies		10,250			10,425
Assets held for sale		3,444			3,498
Investment in Beverly Funding Corporation		32,246			31,342
Prepaid expenses and other		30,378			33,377
Total current assets		531,317			515,816
Property and equipment, net		673,749			694,220
Other assets:
Goodwill, net		56,835			57,102
Other, less allowance for doubtful accounts and notes: 2004 - $2,495; 2003 - $2,120		79,649			79,283
Total other assets		136,484			136,385
	$	1,341,550		$	1,346,421
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	56,433		$	67,572
Accrued wages and related liabilities		93,050			116,717
Accrued interest		12,947			6,896
General and professional liabilities		96,189			93,736
Federal government settlement obligations		13,447			13,125
Liabilities held for sale		696			672
Other accrued liabilities		105,803			102,289
Current portion of long-term debt		13,125			13,354
Total current liabilities		391,690			414,361
Long-term debt		549,473			552,873
Other liabilities and deferred items		138,270			141,001
Commitments and contingencies
Stockholders’ equity:
Preferred stock, shares authorized: 25,000,000		—			—
Common stock, shares issued: 2004 - 115,526,851; 2003 - 115,594,806		11,553			11,559
Additional paid-in capital		896,448			895,950
Accumulated deficit		(537,386	)		(560,825	)
Treasury stock, at cost: 8,283,316		(108,498	)		(108,498	)
Total stockholders’ equity		262,117			238,186
	$	1,341,550		$	1,346,421

(a)The decrease in cash and increase in accounts receivable from December 31, 2003 primarily relate to the Beverly Funding Corporation (“BFC”) transaction. BFC ceased purchasing accounts receivable from Beverly on March 1, 2004 in order to repay, in June, $70 million of medium-term notes. The transaction will eliminate the last of Beverly’s off-balance sheet financing arrangements and is expected to increase our cash position in the second quarter of 2004 by at least $32 million. Additional information will be provided on the conference call for investors.

BEVERLY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

	Three Months Ended
	March 31,
	2004			2003
Cash flows from operating activities:
Net income	$	23,439		$	12,188
Adjustments to reconcile net income to net cash provided by (used for) operating activities, including discontinued operations:
Depreciation and amortization		15,766			17,867
Provision for reserves on accounts, notes and other receivables, net		6,194			10,745
Amortization of deferred financing costs		624			1,271
Asset impairments, workforce reductions and other unusual items		4,082			1,187
Gains on dispositions of facilities and other assets, net		(4,508	)		(10,168	)
Insurance related accounts		(572	)		13,662
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable		(59,324	)(a)		(21,058	)
Operating supplies		104			426
Prepaid expenses		3,923			(6,855	)
Accounts payable and other accrued expenses		(21,602	)		(7,888	)
Income taxes		(585	)		2,382
Other, net		(4,113	)		(2,401	)
Total adjustments		(60,011	)		(830	)
Net cash provided by (used for) operating activities		(36,572	)(a)		11,358
Cash flows from investing activities:
Capital expenditures		(9,777	)		(7,274	)
Proceeds from dispositions of facilities and other assets, net		19,198			38,129
Collections on notes receivable		6,765			183
Payments for designated funds, net		(714	)		(8,988	)
Other, net		(3,746	)		(3,478	)
Net cash provided by investing activities		11,726			18,572
Cash flows from financing activities:
Repayments of long-term debt		(3,629	)		(4,656	)
Repayments of off-balance sheet financing		—			(16,783	)
Proceeds from exercise of stock options		293			—
Deferred financing costs paid		(406	)		(1,817	)
Net cash used for financing activities		(3,742	)		(23,256	)
Net increase (decrease) in cash and cash equivalents		(28,588	)		6,674
Cash and cash equivalents at beginning of period		258,815			115,445
Cash and cash equivalents at end of period	$	230,227		$	122,119
Supplemental schedule of cash flow information:
Cash paid (received) during the period for:
Interest, net of amounts capitalized	$	5,218		$	14,633
Income tax payments (refunds), net		2,450			(1,146	)

(a)The net change in accounts receivable and the related net cash used for operating activities resulted primarily from the Beverly Funding Corporation (“BFC”) transaction. BFC ceased purchasing accounts receivable from Beverly on March 1, 2004 in order to repay, in June, $70 million of medium-term notes. The transaction will eliminate the last of Beverly’s off-balance sheet financing arrangements and is expected to increase our cash position in the second quarter of 2004 by at least $32 million. Additional information will be provided on the conference call for investors.

BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION

	Quarter ended
	March 31,
	2004			2003
Number of Nursing Home Facilities:
Owned		272			317
Leased		96			130
Managed		—			1
Total		368			448
Number of Beds:
Owned		28,325			34,752
Leased		10,566			14,487
Managed		—			75
Total		38,891			49,314
Assisted Living Centers		20			29
Home Care Centers		24			47
Outpatient Clinics		10			10
Patient Days		3,089,000			3,074,000
Nursing Home Occupancy — Continuing Ops (based on operational beds)		88.36	%		87.93	%
Patient Mix (based on patient days):
Medicaid		70.90	%		70.85	%
Medicare		12.53	%		11.91	%
Private & Other		16.57	%		17.24	%
Sources of Revenue (based on $):
Medicaid		50.91	%		52.46	%
Medicare		28.42	%		26.80	%
Private & Other		20.67	%		20.74	%
Average per diem rate (including ancillaries)	$	160.55		$	148.68
Wages and related expenses as a % of revenues		56.74	%		60.07	%

BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
ANALYSIS OF REVENUES

	Quarter ended
	March 31,
	2004		2003
REVENUES(In thousands)
NURSING FACILITIES:
MEDICAID	$	269,435	$	250,788
MEDICARE		123,989		107,592
PRIVATE & OTHER		93,058		91,561
SUBTOTAL		486,482		449,941
AEGIS THERAPIES		27,180		15,960
HOME CARE		10,970		8,341
OTHER		2,788		1,991
TOTALS	$	527,420	$	476,233
PATIENT DAYS(In thousands)
MEDICAID		2,190		2,178
MEDICARE		387		366
PRIVATE & OTHER		512		530
TOTALS		3,089		3,074
PER DIEM RATE(Including Ancillaries)
MEDICAID	$	122.12	$	114.92
MEDICARE — PART A		320.48		293.65
PRIVATE & OTHER		153.31		148.50
TOTALS(1)	$	160.55	$	148.68

(1) Weighted Average Rates

BEVERLY ENTERPRISES, INC.
SUPPLEMENTARY INFORMATION
ANALYSIS OF OTHER OPERATING AND ADMINISTRATIVE EXPENSES
(In thousands)

	Quarter ended
	March 31,
	2004		2003
SUPPLIES	$	30,659	$	28,844
FOOD		10,777		11,787
UTILITIES		17,337		15,285
OTHER CONTROLLABLES		56,325		46,466
REAL ESTATE RENTAL		10,007		10,468
EQUIPMENT RENTAL		4,408		4,384
OTHER NONCONTROLLABLES		13,653		12,818
TOTALS	$	143,166	$	130,052

Beverly Enterprises, Inc.
Projected 2004 EBITDA Range
Reconciliation
(In millions)

Projected EBITDA	$	175.0		$	180.0
Depreciation and amortization		59.3			59.3
Interest expense		46.9			46.9
Interest income		(4.9	)		(4.9	)
Pre-tax income	$	73.7		$	78.7

BEVERLY ENTERPRISES, INC.
EBITDA Reconciliation
(In thousands, except per share amounts)

	Three Months Ended
	March 31,
	2004			2003
Revenues	$	527,420		$	476,233
Costs and expenses:
Wages and related		299,241			286,063
Provision for insurance and related items		33,729			28,262
Other operating and administrative		143,166			130,052
Asset impairments, workforce reductions and other unusual items		4,082			1,187
Net (gains) losses on dispositions		(37	)		194
Total costs and expenses		480,181			445,758
Adjusted EBITDA (Continuing operations)		47,239			30,475
Other income (expenses):
Depreciation and amortization		(15,655	)		(14,159	)
Interest expense		(11,893	)		(16,135	)
Interest income		1,374			1,212
Total other expenses, net		(26,174	)		(29,082	)
Income before provision for income taxes and discontinued operations		21,065			1,393
Provision for income taxes		1,442			1,236
Income before discontinued operations		19,623			157
Discontinued operations, net of taxes: 2004 - $423; 2003 - $0		3,816			12,031
Net income	$	23,439		$	12,188
Basic and diluted net income per share of common stock:
Before discontinued operations	$	0.18		$	—
Discontinued operations, net of taxes		0.04			0.12
Net income per share of common stock	$	0.22		$	0.12
Shares used to compute basic net income per share		107,301			104,743
Shares used to compute diluted net income per share		108,426			104,743

Beverly Enterprises, Inc.
Nursing Facility EBITDA
Reconciliation
(In millions)

	Three Months Ended
	March 31,
	2004			2003
Revenues	$	486.5		$	449.9
EBITDA	$	34.7		$	24.4
Depreciation and amortization		13.5			12.2
Interest expense		2.1			3.1
Interest income		(0.5	)		(0.6	)
Pre-tax income	$	19.6		$	9.7

Beverly Enterprises, Inc.
Hospice EBITDA
Reconciliation
(In thousands)

	Three Months Ended
	March 31,
	2004		2003
Revenues	$	10,663	$	8,313
EBITDA	$	2,054	$	1,430
Depreciation and amortization		41		64
Interest expense		—		—
Interest income		—		—
Pre-tax income	$	2,013	$	1,366