Full Press Release Details
reports THIRD QUARTER 2013 financial results
Elmsford, NY - November 6, 2013 - BioScrip ,
Inc. (NASDAQ: BIOS) today announced 2013 third quarter financial results. Third quarter revenue from continuing operations
was $208.9 million and the net loss from continuing operations was $22.4 million, or a loss of $0.35 per diluted share. Consolidated
Adjusted EBITDA for the third quarter was $12.1 million, and consolidated adjusted earnings per diluted share for the third quarter
was $0.00 per diluted share.
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 and nine months ended
September 30, 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.
Third Quarter Highlights
"Our core infusion business continued to deliver strong
margins and double-digit organic revenue growth in the third quarter," said Rick Smith, President and Chief Executive Officer
of BioScrip. "We closed the CarePoint acquisition during the quarter and our acquisitions are on track to achieve their targeted
range of 12 to 14 percent long-term EBITDA margins, once fully integrated. These underlying results demonstrate our success in
implementing our plan to deliver growth across a national infusion footprint.
"We believe our infusion strategy is delivering results
and we are entering our next phase of strategic execution. Going forward, we will be focused on driving profitability by enhancing
our operational efficiency, streamlining our cost structure and optimizing the value of our de novo and legacy assets. We have
already taken steps to achieve significant cost savings as we enter 2014, and we remain confident in the fundamentals of our infusion
services and transitional care models to drive continued growth," concluded Smith.
Results of Operations
Third Quarter 2013 versus Third Quarter 2012
Revenue from continuing operations for the third quarter of
2013 totaled $208.9 million, compared to $170.4 million in the prior year period, an increase of $38.5 million, or 22.6%. Infusion
Services segment revenue was $174.8 million in the third quarter of 2013, as compared to $125.9 million in the prior year period.
The 38.8% increase was driven primarily by organic volume growth and additional revenue related to acquisitions. Home Health Services
segment revenue was $18.1 million for the third quarter of 2013, as compared to $17.3 million in the prior year period. The 4.5%
increase was primarily the result of growth in the volume of private duty nursing activity, offset by a reduction in reimbursement
rates. PBM Services segment revenue was $16.0 million for the third quarter of 2013, compared to $27.1 million for the prior year
period. The decrease was largely due to decreases in the funded PBM and prescription discount card businesses, primarily from the
termination of a contract with a large, low-margin, funded PBM client, as well as a decrease in volume in the prescription discount
Consolidated gross profit for the third quarter of 2013 was
$68.7 million, or 32.9% of revenue, compared to $58.0 million, or 34.0% of revenue, in the prior year period. The increase in gross
profit was the result of growth in the volume of revenue in the Infusion Services segment partially offset by lower PBM Services
gross profit. Consolidated gross profit margin percentage was impacted by lower revenue in PBM Services that generally has a higher
gross profit percentage.
During the third quarter of 2013, Infusion Services Segment
Adjusted EBITDA was $14.7 million, or 8.4% of segment revenue, compared to $9.9 million, or 7.9% of segment revenue, in the prior
year period. The 48.0% improvement in Adjusted EBITDA in the Infusion Services segment resulted primarily from organic revenue
growth and acquisitions. The 50-basis-point improvement in Adjusted EBITDA margin percentage was primarily due to improved mix
and gross profit margin as well as increased operating leverage.
The Home Health Services Segment Adjusted EBITDA in the third
quarter of 2013 was $0.6 million, or 3.1% of segment revenue, compared to $1.4 million, or 8.1% of segment revenue, in the comparable
prior year period. The decrease in Adjusted EBITDA margin percentage in the Home Health Services segment was primarily due to increased
volume of lower-margin private duty nursing as well as a reduction in reimbursement rates.
The PBM Services Segment Adjusted EBITDA was $4.3 million, or
26.7% of segment revenue, for the third quarter of 2013 compared to $6.9 million, or 25.5% of segment revenue, in the prior year
period. The increase in Adjusted EBITDA margin percentage in the PBM Services segment was primarily due to the termination of a
contract with a large, low-margin, funded PBM client.
On a consolidated basis, BioScrip reported $12.1 million of
Adjusted EBITDA during the third quarter of 2013, or 5.8% of total revenue, compared to $11.6 million, or 6.8% of total revenue,
in the prior year period. The performance in the quarter reflects continued growth and progress in the core Infusion Services segment,
offset by continued weakness in the non-core PBM Services and Home Health Services segments.
Interest expense in the third quarter of 2013 was $7.2 million
compared to $6.5 million in the prior year period.
Income tax benefit for continuing operations in the third quarter
was $0.6 million compared to an income tax benefit of $2.5 million in the prior year period.
Net loss from continuing operations for the third quarter of
2013 was $22.4 million, or a loss of $0.35 per diluted share, compared to a net loss of $0.6 million, or $0.01 per diluted share,
in the prior year period. The net loss from continuing operations was impacted by a loss on early extinguishment of debt of $15.9
million recognized in order to retire the 10.25% senior notes, as well as acquisition and integration expenses of $4.9 million
in the third quarter.
Finally, as previously disclosed in the Company's current
report on Form 8-K filed on September 23, 2013, BioScrip is responding to a civil investigation regarding certain operations of
its legacy specialty pharmacy division. In accordance with accounting rules, the Company is required to provide an estimate of
a potential loss. Accordingly, BioScrip has accrued $15 million in discontinued operations, which represents the Company's
estimate at this time. The actual outcome is uncertain and actual loss could be higher.
Nine Months Ended September 30, 2013 versus Nine Months Ended
Revenue from continuing operations for the nine months ended
September 30, 2013 totaled $598.7 million, compared to $481.9 million in the prior year period, a 24.2% increase. Infusion Services
segment revenue was $485.3 million for the nine months ended September 30, 2013, compared to $346.0 million in the prior year period.
The 40.3% increase was driven primarily by organic volume growth and additional revenue related to acquisitions. Home Health Services
segment revenue for the nine months ended September 30, 2013 was $54.2 million compared to $50.9 million in the prior year period.
The 6.6% increase was primarily the result of growth in the volume of private duty nursing activity, offset by a reduction in reimbursement
rates. PBM Services segment revenue for the nine months ended September 30, 2013 was $59.1 million, compared to $85.1 million in
the prior year period. The 30.5% decrease was due primarily to decreases in funded PBM revenue and prescription discount card revenue.
Consolidated gross profit for the nine months ended September
30, 2013 was $196.9 million, or 32.9% of revenue, compared to $164.6 million, or 34.1% of revenue, in the prior year period. The
increase in gross profit dollars was the result of growth in the volume of revenue in the Infusion Services segment partially offset
by lower PBM Services gross profit. Consolidated gross profit margin percentage was impacted by growth of lower-margin Infusion
Services revenues as a percent of total revenue versus the higher-margin Home Health segment and PBM segment revenue.
During the nine months ended September 30, 2013, the Infusion
Services Segment Adjusted EBITDA was $41.2 million, or 8.5% of segment revenue, compared to $25.7 million, or 7.4% of segment revenue,
in the prior year period.
The Home Health Services Segment Adjusted EBITDA for the nine
months ended September 30, 2013 was $2.5 million, or 4.7% of segment revenue, compared to $3.6 million, or 7.0% of segment revenue,
in the prior year period.
The PBM Services Segment Adjusted EBITDA was $15.4 million,
or 26.0% of segment revenue, for the nine months ended September 30, 2013, compared to $19.4 million, or 22.8% of segment revenue,
in the prior year period.
On a consolidated basis, BioScrip reported $35.6 million of
Adjusted EBITDA for the nine months ended September 30, 2013, or 5.9% of total revenue, compared to $29.0 million, or 6.0% of total
revenue, in the prior year period.
Interest expense for the nine months ended September 30, 2013
was $20.2 million, compared to $19.7 million in the prior year period.
Income tax benefit for continuing operations for the nine months
ended September 30, 2013 was $31 thousand compared to an income tax benefit of $2.6 million in the prior year period.
Net loss from continuing operations for the nine months ended