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BioScrip Reports First Quarter 2013 Financial Results



            BioScrip Reports First Quarter 2013 Financial Results

PR Newswire

ELMSFORD, N.Y., May 8, 2013

ELMSFORD, N.Y., May 8, 2013 /PRNewswire/ -- BioScrip, Inc. (NASDAQ: BIOS)
today announced 2013 first quarter financial results.  First quarter revenue
from continuing operations was $199.1 million and the net loss from continuing
operations was $7.5 million, or $0.13 per diluted share. Consolidated Adjusted
EBITDA for the first quarter was $11.5 million, and consolidated Adjusted EPS
for the first quarter was $0.04 per diluted share.

(Logo: http://photos.prnewswire.com/prnh/20130117/NY44138LOGO )

As a result of the sale of the Company's traditional and specialty pharmacy
mail operations and community retail pharmacy stores on May 4, 2012 (the
"Pharmacy Services Asset Sale"), the Company's financial statements reflect
the discontinued operations' results for the three months ended March 31, 2013
and 2012 separate from the continuing operations of the business. The
remaining assets and liabilities of the divested business that were not
transferred as a part of the Pharmacy Services Asset Sale are included in
continuing operations.  

First Quarter Highlights

  o Revenue from continuing operations increased by $43.4 million, or 27.9%,
    as compared to the prior year. Revenue from our Infusion Services segment
    increased by $45.3 million, or 41.5% as compared to the prior year;
  o Gross profit from continuing operations increased 18.1% to $63.2 million,
    or 31.8% of revenue, from $53.5 million, or 34.4% of revenue, in the prior
    year period;
  o Adjusted EBITDA from continuing operations increased $3.1 million, or
    37.0% to $11.5 million, or 5.8% of revenue, from $8.4 million, or 5.4% in
    the prior year period.  The performance in the quarter included
    investments in growth initiatives, such as increased sales resources and
    the development of new market offerings;
  o Acquired HomeChoice Partners, Inc. ("HomeChoice"), formerly a
    majority-owned subsidiary of DaVita HealthCare Partners Inc. (NYSE: DVA);
    and
  o Initiated a review of the Company's capital structure to support its
    growth strategy.

"We are pleased to report another quarter of solid performance.  Our results
reflect the continued execution of our strategic plan, growing organically and
targeting opportunistic acquisitions that enable us to expand our national
infusion footprint. Our site of service initiatives are providing us with
increased access to patient census and the opportunity for continued growth as
patient care moves to lower-cost settings, such as the home or alternate sites
of administration," said Rick Smith, President and Chief Executive Officer of
BioScrip.

Results of Operations

First Quarter 2013 versus First Quarter 2012
Revenue from continuing operations for the first quarter of 2013 totaled
$199.1 million, compared to $155.6 million for the same period a year ago, an
increase of $43.4 million or 27.9%.  Infusion Services segment revenue was
$154.4 million in the first quarter, as compared to $109.1 million for the
same period in 2012.  The 41.5% increase was driven primarily by overall
volume growth as well as additional revenue related to acquisitions.  Home
Health Services segment revenue was $17.9 million for the first quarter of
2013, as compared to $16.7 million in the prior year quarter.  The 7.4%
increase was primarily the result of growth in volume from private duty
nursing activity.  PBM Services segment revenue was $26.8 million for the
first quarter of 2013, compared to $29.9 million for the prior year period. 
The decrease was due primarily to a reduction in discount card volume.

Consolidated gross profit for the first quarter of 2013 was $63.2 million, or
31.8% of revenue, compared to $53.5 million, or 34.4% of revenue, for the
first quarter of 2012.  The increase in gross profit was the result of growth
in Infusion Services segment revenues.  The decline in gross profit margin
percentage was mainly the result of business mix.

During the first quarter of 2013, Infusion Services Segment Adjusted EBITDA
was $12.3 million, or 8.0% of segment revenue, compared to $7.8 million, or
7.1% of segment revenue in the prior year quarter.

The Home Health Services Segment Adjusted EBITDA in the first quarter of 2013
was $883,000, or 4.9% of segment revenue, compared to $1.1 million, or 6.5% of
segment revenue, in the comparable prior year period. 

The PBM Services Segment Adjusted EBITDA was $6.2 million, or 23.2% of segment
revenue, for the first quarter of 2013 compared to $6.1 million, or 20.4% of
segment revenue, in the prior year quarter.

On a consolidated basis, BioScrip reported $11.5 million of Adjusted EBITDA
during the first quarter of 2013, or 5.8% of total revenue, compared to $8.4
million, or 5.4% of total revenue, in the same period last year.  The
performance in the quarter included investments in growth initiatives, such as
increased sales resources and the development of new market offerings.

Interest expense in the first quarter of 2013 was $6.5 million compared to
$6.6 million in the prior year period.

Income tax expense for continuing operations in the first quarter was $58,000
compared to an income tax benefit of $502,000 in the first quarter of 2012.

Net loss from continuing operations for the first quarter of 2013 was $7.5
million, or a loss of $0.13 per diluted share, compared to a net loss of $2.0
million, or $0.04 per diluted share, for the first quarter of 2012.  Adjusted
EPS from continuing operations for the first quarter of 2013 was $0.04 per
diluted share, compared to Adjusted EPS from continuing operations of $0.00
per diluted share, for the first quarter of 2012.

Liquidity and Capital Resources
The Company's cash balance at the end of the first quarter was zero and
outstanding borrowings under its revolving credit facility was
approximately $28.0 million as it utilized a combination of its available cash
and borrowings under its revolving credit facility to fund the acquisition of
HomeChoice.  Subsequent to the end of the first quarter, the Company raised
net proceeds of $118.6 million from a public offering of its common stock and
used part of such net proceeds to pay down outstanding amounts under its
revolving credit facility.

Outlook
The Company reaffirms its initial 2013 revenue target of $830.0 million to
$865.0 million and 2013 Adjusted EBITDA target of $67.0 million to $73.0
million.

Conference Call
BioScrip will host a conference call to discuss its first quarter 2013
financial results on May 9, 2013 at 8:30 a.m. Eastern Time.

Interested parties may participate in the conference call by dialing
800-705-5308 (US), or 303-223-4377 (International), 5-10 minutes prior to the
start of the call. A replay of the conference call will be available for two
weeks after the call's completion by dialing 800-633-8284 (US) or 402-977-9140
(International) and entering conference call ID number 21656383. An audio
webcast and archive will also be available for 30 days under the "Investor
Relations" section of the BioScrip website at www.bioscrip.com.

About BioScrip, Inc.
BioScrip, Inc. provides comprehensive infusion and home care solutions. By
partnering with patients, physicians, healthcare payors, government agencies
and pharmaceutical manufacturers we are able to provide access to infusible
medications and management solutions. Our goal is to optimize outcomes for
chronic and other complex healthcare conditions and enhance the quality of
patient life. BioScrip brings clinical competence in providing high-touch,
comprehensive infusion and nursing services to patients in the most convenient
ways possible. Through our customer services and treatments we aim to ensure
the best possible therapy outcome.

Forward Looking Statements – Safe Harbor

This press release includes statements that may constitute "forward-looking
statements," including projections of certain measures of the
Company's results of operations, projections of certain charges and expenses,
and other statements regarding the Company's goals, regulatory approvals and
strategy.  These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.  You can identify these
statements by the fact that they do not relate strictly to historical or
current facts.  In some cases, forward-looking statements can be identified by
words such as "may," "should," "could," "anticipate," "estimate," "expect,"
"project," "intend," "plan," "believe," "predict," "potential," "continue"  or
comparable terms.  Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and, because such
statements inherently involve risks and uncertainties, actual results may
differ materially from those in the forward-looking statements. Factors that
could cause or contribute to such differences include but are not limited to
risks associated with: the Company's ability to grow its Infusion Services
segment organically or through acquisitions and obtain financing in connection
therewith; its ability to effectively integrate acquisitions; its ability to
reduce operating costs while sustaining growth; reductions in federal, state
and commercial payor reimbursement for the Company's products and services;
increased government regulation related to the health care and insurance
industries; as well as the risks described in the Company's periodic filings
with the Securities and Exchange Commission, including the Company's annual
report on Form 10-K for the year ended December 31, 2012.  The Company does
not undertake any duty to update these forward-looking statements after the
date hereof, even though the Company's situation may change in the future. 
All of the forward-looking statements herein are qualified by these cautionary
statements.

Reconciliation to Non-GAAP Financial Measures

In addition to reporting all financial information required in accordance with
generally accepted accounting principles ("GAAP"), the Company is also
reporting EBITDA, Adjusted EBITDA, and Adjusted EPS, which are non-GAAP
financial measures. EBITDA, Adjusted EBITDA and Adjusted EPS are not
measurements of financial performance under GAAP and should not be used in
isolation or as a substitute or alternative to net income, operating income or
any other performance measure derived in accordance with GAAP, or as a
substitute or alternative to cash flow from operating activities or a measure
of our liquidity. In addition, the Company's definitions of EBITDA, Adjusted
EBITDA and Adjusted EPS may not be comparable to similarly titled non-GAAP
financial measures reported by other companies.  EBITDA represents net income
before net interest expense, income tax expense, depreciation and
amortization.  Adjusted EBITDA, as defined by the Company, represents net
income before net interest expense, income tax expense, depreciation and
amortization, stock-based compensation expense, acquisition and integration
expenses, and restructuring and other expenses. As part of restructuring and
other expenses, the Company may incur significant charges such as, but not
limited to, the write down of certain long−lived assets, temporary redundant
expenses, retraining expenses, potential cash bonus payments and potential
accelerated payments or terminated costs for certain of its contractual
obligations. Adjusted EPS, as defined by the Company, represents earnings per
diluted share, excluding the same elements in calculating Adjusted EBITDA
(restructuring and other expenses, acquisition and integration expenses,
stock-based compensation expense) as well as the impact of acquisition-related
intangible amortization.  Management believes that these non-GAAP financial
measures provide useful supplemental information regarding the performance of
our business operations and facilitates comparisons to our historical
operating results. For a full reconciliation of EBITDA, Adjusted EBITDA and
Adjusted EPS to the most comparable GAAP financial measures, please see the
attachments to this earnings release. 

(Financial Tables Follow)

 

Schedule 1
BIOSCRIP, INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except for share amounts)
                                         March 31,          December 31,

                                         2013               2012
ASSETS
Current assets
Cash and cash equivalents                $                  $           62,101
                                          -
Receivables, less allowance for doubtful
accounts of $21,482 and $22,728 at
                                         158,127            129,103
December 31, 2012 and December 31, 2011,
respectively
Inventory                                22,819             34,034
Prepaid expenses and other current       9,081              10,189
assets
Total current assets                     190,027            235,427
Property and equipment, net              27,767             23,721
Goodwill                                 414,234            350,810
Intangible assets, net                   19,364             17,446
Deferred financing costs                 2,522              2,877
Investments in and advances to           10,415             10,042
unconsolidated affiliate
Other non-current assets                 1,385              2,053
Total assets                             $        665,714   642,376
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt        $          27,992  953
Accounts payable                         32,108             34,438
Claims payable                           7,599              7,411
Amounts due to plan sponsors             16,303             18,173
Accrued interest                         11,575             5,803
Accrued expenses and other current       37,580             41,491
liabilities
Total current liabilities                133,157            108,269
Long-term debt, net of current portion   225,372            225,426
Deferred taxes                           10,748             10,291
Other non-current liabilities            8,971              4,981
Total liabilities                        378,248            348,967
Stockholders' equity
Preferred stock, $.0001 par value;
5,000,000 shares authorized; no shares
issued or                                —                  —

outstanding
Common stock, $.0001 par value;
125,000,000 shares authorized; shares
issued:
                                         6                  6
59,695,646 and 59,600,713, respectively;
shares outstanding: 57,113,126 and

57,026,957, respectively
Treasury stock, shares at cost:          (10,311)           (10,311)
2,582,520 and 2,582,520, respectively
Additional paid-in capital               390,983            388,798
Accumulated deficit                      (93,212)           (85,084)
Total stockholders' equity               287,466            293,409
Total liabilities and stockholders'      $        665,714   $         642,376
equity

Schedule 2
BIOSCRIP, INC
CONSOLIDATED STATEMENTS OF OPERATIONS 
(in thousands, except per share amounts)
                                      Three Months Ended
                                      March 31,
                                      2013                 2012
Product revenue                       $           150,024  $           106,803
Service revenue                       49,047               48,830
Total revenue                         199,071              155,633
Cost of product revenue               105,533              72,326
Cost of service revenue               30,301               29,785
Total cost of revenue                 135,834              102,111
Gross profit                          63,237               53,522
% of revenues                         31.8%                34.4%
Selling, general and administrative   52,791               44,575
expenses
Bad debt expense                      3,397                3,465
Acquisition and integration expenses  4,623                172
Restructuring and other expenses      1,278                387
Amortization of intangibles           2,082                879
Income from operations                (934)                4,044
Interest expense, net                 6,478                6,569
Net income (loss) from continuing     (7,412)              (2,525)
operations,  before income taxes
Tax provision (benefit)               58                   (502)
Net income (loss) from continuing     (7,470)              (2,023)
operations, net of income taxes
Net income (loss) from discontinued   (658)                (680)
operations, net of income taxes
Net income (loss)                     $                    $            
                                      (8,128)              (2,703)
Basic weighted average shares         57,047               55,307
Diluted weighted average shares       57,047               55,307
Income (loss) per common share:
Basic loss from continuing operations $                    $              
                                      (0.13)               (0.04)
Basic income (loss) from discontinued $                    $              
operations                            (0.01)               (0.01)
Basic income (loss)                   $                    $              
                                      (0.14)               (0.05)
Diluted loss from continuing          $                    $              
operations                            (0.13)               (0.04)
Diluted  income (loss) from           $                    $              
discontinued operations               (0.01)               (0.01)
Diluted income (loss)                 $                    $              
                                      (0.14)               (0.05)

Schedule 3
BIOSCRIP, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                       Three Months Ended March 31,
                                       2013                 2012
Cash flows from operating activities:
Net income (loss)                      $           (8,128)  $        (2,703)
Less: Income from discontinued         (658)                (680)
operations, net of income taxes
Loss from continuing operations, net   (7,470)              (2,023)
of income taxes
Adjustments to reconcile net income
(loss) to net cash provided by (used
in) operating activities:
Depreciation                           2,459                1,931
Amortization of intangibles            2,082                879
Amortization of deferred financing     356                  284
costs
Change in deferred income tax          457                  (300)
Compensation under stock-based         1,973                966
compensation plans
Loss on disposal of fixed assets       13                   23
Changes in assets and liabilities, net
of acquired business:
Receivables, net of bad debt expense   (16,526)             (16,761)
Inventory                              13,199               4,215
Prepaid expenses and other assets      4,787                4,238
Accounts payable                       (2,822)              5,587
Claims payable                         187                  (6,598)
Amounts due to plan sponsors           (4,140)              (874)
Accrued expenses and other liabilities (6,745)              4,557
Net cash provided by (used in)
operating activities from continuing   $         (12,190)   $        (3,876)
operations
Net cash provided by (used in)
operating activities from discontinued (658)                6,401
operations
Net cash provided by (used in)         $         (12,848)   $          2,525
operating activities
Cash flows from investing activities:
Purchases of property and equipment,   $           (3,655)  $        (1,547)
net
Cash consideration paid for asset      (72,325)             —
acquisitions
Cash consideration paid to DS Pharmacy —                    (2,935)
Cash consideration paid for
unconsolidated affiliate, net of cash  (900)                —
acquired
Net cash provided by (used in)
investing activities from continuing   (76,880)             (4,482)
operations
Net cash provided by (used in)
investing activities from discontinued —                    2,741
operations
Net cash used in investing activities  $         (76,880)   $        (1,741)
Cash flows from financing activities:
Borrowings on line of credit           214,145              481,151
Repayments on line of credit           (187,092)            (483,224)
Repayments of capital leases           (68)                 (35)
Net proceeds from exercise of employee 642                  1,324
stock compensation plans
Net cash provided by (used in)
financing activities from continuing   $          27,627    $           (784)
operations
Net change in cash and cash            (62,101)             —
equivalents
Cash and cash equivalents - beginning  62,101               —
of period
Cash and cash equivalents - end of     —                    —
period
DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for        $               322  $          1,241
interest
Cash paid during the period for income $                    $             197
taxes                                   (6)
DISCLOSURE OF NON-CASH TRANSACTIONS:
Capital lease obligations incurred to  —                    $               20
acquire property and equipment

 

Schedule 4
BIOSCRIP, INC
Reconciliation between GAAP and Non-GAAP Measures
(in thousands)
                                      Three Months Ended
                                      March 31,
                                      2013                 2012
Results of Operations:
Revenue:
Infusion Services - product revenue   $         150,024    $        106,803
Infusion Services - service revenue   4,353                2,250
Total Infusion Services revenue       154,377              109,053
Home Health Services - service        17,942               16,711
revenue
PBM Services - service revenue        26,752               29,868
Total revenue                         $         199,071    $        155,632
Adjusted EBITDA by Segment before
corporate overhead:
Infusion Services                     $           12,315   $            7,783
Home Health Services                  883                  1,080
PBM Services                          6,199                6,098
Total Segment Adjusted EBITDA         19,397               14,961
Corporate overhead                    (7,916)              (6,582)
Consolidated Adjusted EBITDA          11,481               8,379
Interest expense, net                 (6,478)              (6,569)
Income tax (expense) benefit          (58)                 502
Depreciation                          (2,459)              (1,931)
Amortization of intangibles           (2,082)              (879)
Stock-based compensation expense      (1,973)              (966)
Acquisition and integration expenses  (4,623)              (172)
Restructuring and other expenses      (1,278)              (387)
Net (loss) income:                    $           (7,470)  $           (2,023)
Supplemental Operating Data
Total Assets
Infusion Services                     $         523,857    $        438,623
    Home Health Services              63,280               62,403
PBM Services                          30,909               36,354
Corporate unallocated                 45,189               95,813
Assets from discontinued operations   -                    -
Assets associated with discontinued   2,479                9,183
operations, not sold
Total                                 $         665,714    $        642,376

 

BIOSCRIP, INC
Reconciliation between GAAP and Non-GAAP Earnings Per Share
(in thousands)
                                                Three Months Ended
                                                March 31,
                                                2013 ^1,2      2012 ^3,4
Net income from continuing operations           $              $          
                                                (7,470)        (2,023)
       Non-GAAP adjustments:
             Restructuring and other expenses   1,278          308
             Acquisition and integration        4,623          137
             expenses
             Amortization of intangibles        2,082          699
             Compensation under stock-based     1,973          769
             compensation plans
Non-GAAP net income from continuing operations  $              $            
                                                 2,486          (110)
Earnings per share from continuing operations,  $              $            
basic and diluted                               (0.13)         (0.04)
       Non-GAAP adjustments:
             Restructuring and other expenses   0.02           0.01
             Acquisition and integration        0.08           -
             expenses
             Amortization of intangibles        0.04           0.01
             Compensation under stock-based     0.03           0.02
             compensation plans
Non-GAAP earnings per share from continuing     $              $              
operations, basic and diluted                    0.04             -
Weighted average shares outstanding, basic      57,047         55,307
Weighted average shares outstanding, diluted    58,509         55,307

 

Schedule 4
BIOSCRIP, INC
Reconciliation between GAAP and Non-GAAP Earnings Per Share
(in thousands)
    For the three months ended March 31, 2013 non-GAAP net income from
    continuing operations adjustments are net of tax, calculated using an
    annual effective tax rate offset by the effect of our net operating loss
(1) carryforwards.  The tax expense netted against restructuring and other
    expenses, acquisition and integration expenses, amortization of
    intangibles, and stock-based compensation expense was zero for each,
    respectively.
    For the three months ended March 31, 2013, non-GAAP Adjusted EPS per basic
    and diluted share from continuing operations adjustments are net of tax,
    calculated using an annual effective tax rate method offset by the effect
(2) of our net operating loss carryforwards.  The tax expense per basic and
    diluted share netted against restructuring and other expenses, acquisition
    and integration expenses, amortization of intangibles, and stock-based
    compensation expense was $(0.00) per share, respectively.
    For the three months ended March 31, 2012, non-GAAP net income from
    continuing operations adjustments are net of tax, calculated using an
    annual effective tax rate offset by the effect of our net operating loss
(3) carryforwards.  The tax expense netted against restructuring and other
    expenses, acquisition and integration expenses, amortization of
    intangibles, and stock-based compensation expense was $79, $35, $180 and
    $197 respectively.
    For the three months ended March 31, 2012, non-GAAP Adjusted EPS per basic
    and diluted share from continuing operations adjustments are net of tax,
    calculated using an annual effective tax rate  offset by the effect of our
(4) net operating loss carryforwards.  The tax expense per basic and diluted
    share netted against restructuring and other expenses, acquisition and
    integration expenses, amortization of intangibles, and stock-based
    compensation expense was $(0.00) per share, respectively.

 

SOURCE BioScrip, Inc.

Website: http://www.bioscrip.com
Contact: Hai Tran, BioScrip, Inc., 952-979-3768; or Lisa Wilson, In-Site
Communications, Inc., 212-759-3929
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