BIOS - BioScrip, Inc. Reports Significant Increase In Operating Income
May 4, 2007 8:46:00 AM
Copyright Business Wire 2007
ELMSFORD, N.Y.--(BUSINESS WIRE)--
BioScrip, Inc. (NASDAQ: BIOS) today reported a first quarter 106% increase in operating profit over the fourth quarter 2006, on revenues of $296.3 million. First quarter 2007 operating profit was $136,000; EBITDAO (earnings before interest, taxes, depreciation, amortization and option expense) was $3.0 million with a net loss of $1.3 million, or $0.04 per share. This compares to first quarter 2006 revenues of $299.7 million, an operating loss of $1.6 million, EBITDAO of $1.7 million, and a net loss of $1.2 million, or $0.03 per share. The Company adopted FIN 48 effective January 1, 2007. As a result, the Company recorded a $2.4 million tax liability with a corresponding charge to retained earnings.
Chairman and CEO, Richard H. Friedman, stated "Our first quarter 2007 results indicate that we are making substantial progress on our plan of returning BioScrip to profitability. The Company reported a $2.5 million sequential increase in quarterly operating income and increasingly positive EBITDAO which is consistent with our commitment to shareholders."
First Quarter Reported Results
First quarter 2007 Specialty Services revenue was $234.9 million, an increase of $31.3 million, or 15.4% over the prior year, due primarily to revenues associated with preferred distribution arrangements with manufacturers for newly approved drugs, strong growth in infusion and new business resulting from CAP.
First quarter 2007 PBM Services revenue was $61.4 million, a decrease of $34.6 million, or 36.0%, as compared to the first quarter of 2006. The decline in revenue is primarily due to the loss of a major PBM customer previously announced.
As a result, revenue for the first quarter 2007 was $296.3 million compared to $299.7 million for the same period a year ago.
Gross profit for the first quarter 2007 was $32.9 million, or 11.1%, compared to $30.3 million, or 10.1%, for the same period of 2006. Gross margin dollar improvement is primarily due to higher margin Specialty sales.
First quarter 2007 total operating expenses increased by a net $0.9 million to $32.8 million, or 11.1%, of total revenue from $31.9 million, or 10.7%, of total revenue for the first quarter of 2006. The increase is primarily due to ongoing operating expenses associated with the acquisition of our California-based infusion center, operating expense increases related to CAP, and an increase in bad debt expense, partially offset by last year's cost reduction efforts.
CAP Update
First quarter 2007 CAP revenues increased 38% over fourth quarter 2006 to $9.9 million. BioScrip has initiated marketing programs in order to maximize efforts to support the upcoming physician election period which occurs from May 1, 2007 through June 15, 2007 for enrollments effective August 1, 2007
Conference Call Information
BioScrip will host a conference call to discuss first quarter 2007 financial results on Friday, May 4 at 10:00 a.m. EDT. Interested parties may participate in the conference call by dialing 800-266-1825 (US), or 212-676-4900 (International), 5-10 minutes prior to the start of the call. A replay of the conference call will be available from 12:30 PM EDT on May 4 through 12:30 PM EDT on May 10, by dialing 800-633-8284 (US), or 402-977-9140 (International), and entering reservation #21337474. An audio webcast and archive of the conference call will also be available under the investor relations section of the BioScrip website, www.bioscrip.com.
About BioScrip, Inc.
BioScrip, Inc. provides comprehensive pharmaceutical healthcare solutions. We partner with healthcare payors, pharmaceutical manufacturers, government agencies, physicians and patients to deliver cost effective programs in an effort to optimize the quality of patient life. We focus our products and services in two core areas: Specialty pharmaceutical services, both nationally and community-based, and Pharmacy Benefit Management services. Our specialty services capabilities include condition-specific distribution and clinical management programs for individuals living with health conditions such as HIV/AIDS, cancer, immune deficiency, Hepatitis C, Rheumatoid Arthritis, Multiple Sclerosis, transplantation and Crohn's disease. Our pharmacy benefit management programs include benefit plan design, pharmacy network management and sophisticated reporting capabilities. In addition, we have 36 community, mail service and infusion pharmacies across the U.S., providing nationwide access to prescription medications and clinical services.
Forward Looking Statements
This press release may contain statements which constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the intent, belief or current expectations of the Company, its directors, or its officers with respect to the future operating performance of the Company. Investors are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward looking statements as a result of various factors. Important factors that could cause such differences are described in the Company's periodic filings with the Securities and Exchange Commission.
Earnings before interest, taxes, depreciation, amortization, and option expense ("EBITDAO") is a non-GAAP financial measure as defined under U.S. Securities and Exchange Commission Regulation G. As required by Regulation G, BioScrip has provided a reconciliation of this measure to the most comparable GAAP financial measure.
See Schedule 2 for a reconciliation of the differences between the non-GAAP financial measures and the most directly comparable GAAP financial measures. As required by Regulation G under the Securities Exchange Act, the Company has provided a quantitative comparison between GAAP and disclosed non-GAAP financial measures. The non-GAAP measure presented provides important insight into the ongoing operations and a meaningful benchmark to evidence the Company's trend towards a return to profitability.
Schedule 1
BIOSCRIP, INC.
CONSOLIDATED STATEMENT of OPERATIONS
(in thousands, except per share data)
Three Months Ended
March 31,
-------------------
2007 2006
-------------------
Revenue $296,342 $299,718
Cost of revenue 263,394 269,388
--------- ---------
Gross profit 32,948 30,330
% of revenue 11.1% 10.1%
Selling, general and administrative expenses 28,369 27,886
Bad debt expense 2,996 2,299
Amortization of intangibles 1,447 1,622
Merger related expenses - 131
--------- ---------
Total operating expenses 32,812 31,938
% of revenue 11.1% 10.7%
Income (loss) from operations 136 (1,608)
Interest expense, net (1,085) (450)
--------- ---------
Loss before income taxes (949) (2,058)
Provision for (benefit from) income taxes 398 (902)
--------- ---------
Net loss ($1,347) ($1,156)
========= =========
Basic net loss per share ($0.04) ($0.03)
Diluted net loss per share ($0.04) ($0.03)
========= =========
Basic weighted-average shares 37,490 37,202
Diluted weighted-average shares 37,490 37,202
========= =========
Schedule 2
BIOSCRIP, INC.
RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES
(in thousands)
Three Months Ended
March 31,
------------------
2007 2006
------------------
Income (loss) from operations $136 ($1,608)
Addback items:
Depreciation 1,044 1,042
Amortization of intangibles 1,447 1,622
SFAS 123R stock option expense 342 645
--------- --------
Earnings before interest, taxes, depreciation,
amortization and stock option expense (EBITDAO) $2,969 $1,701
========= ========
Schedule 3
BIOSCRIP, INC
CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
March 31, 2007
(unaudited) December 31, 2006
ASSETS
Current assets
Cash and cash equivalents $1 $-
Receivables, less allowance for
doubtful accounts of $12,612
and $13,774 at March 31, 2007
and December 31, 2006,
respectively 136,095 135,139
Inventory 36,616 33,471
Prepaid expenses and other
current assets 4,845 2,090
-------------- -----------------
Total current assets 177,557 170,700
Property and equipment, net 10,160 10,409
Other assets and investments 464 681
Goodwill 114,824 114,991
Intangible assets, net 7,228 8,675
-------------- -----------------
Total assets $310,233 $305,456
-------------- -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Line of credit $50,185 $52,895
Accounts payable 52,669 51,724
Claims payable 14,611 9,548
Payables to plan sponsors 590 589
Payor Allowance 10,492 9,691
Accrued expenses and other
current liabilities 8,697 9,230
-------------- -----------------
Total current liabilities 137,244 133,677
Unrecognized tax benefits 4,070 -
Deferred taxes, net 10,663 9,946
-------------- -----------------
Total liabilities 151,977 143,623
-------------- -----------------
Stockholders' equity
Preferred stock, $.0001 par
value; 5,000,000 shares
authorized, no shares issued or
outstanding - -
Common stock, $.0001 par value;
75,000,000 shares authorized;
shares issued: 40,859,726 and
40,680,233 respectively; shares
outstanding: 37,492,757 and
37,488,257, respectively; 4 4
Treasury stock, 2,247,150 shares
at cost (8,002) (8,002)
Additional paid-in capital 239,506 239,315
Accumulated deficit (73,252) (69,484)
-------------- -----------------
Total stockholders' equity 158,256 161,833
-------------- -----------------
Total liabilities and
stockholders' equity $310,233 $305,456
-------------- -----------------
Source: BioScrip, Inc.
----------------------------------------------
BioScrip
Inc.
Craig Allison
914-460-1636
Investor Relations
callison@bioscrip.com
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