Full Press Release Details
Chief Financial Officer
BioScrip Reports Second Quarter 2016
Q2 Consolidated Revenue of $232.5 Million,
Loss from continuing operations, net of income taxes of $(8.3) Million and Adjusted EBITDA of $10.4 Million
Full Year 2016 Guidance Updated to Reflect
Pending Acquisition of Home Solutions
DENVER, CO, August 8, 2016 - BioScrip, Inc. (NASDAQ: BIOS)
("BioScrip" or the "Company") today announced financial results for the second quarter 2016. For the second
quarter, the Company reported revenue from continuing operations of $232.5 million, net loss from continuing operations of ($8.3)
million and diluted EPS of ($0.14) loss per share.
Second Quarter Highlights
Rick Smith, President and Chief Executive Officer stated, "We
are pleased with our second quarter results, during which BioScrip delivered its lowest loss from continuing operations and its
strongest Adjusted EBITDA since 2013. Our solid quarter demonstrates the significant progress we have made since beginning to implement
our operational improvement initiatives."
Smith added, "BioScrip is poised to enter into its next
phase following the completion of our acquisition of Home Solutions, which we anticipate will add double-digit organic core revenue
growth to our platform and support stronger patient census levels. We are on track to close the Home Solutions transaction in September
and expect a smooth and successful integration."
Results of Operations
Second Quarter 2016 versus Prior Year Second Quarter 2015
Revenue from continuing operations for the second quarter of
2016 was $232.5 million, compared to $246.9 million in the second quarter of 2015, a decrease of $14.4 million or 5.8%. This revenue
decrease resulted from the Company's previously announced shift in revenue mix to a greater percentage of core infusion revenue
and less lower margin chronic revenue.
Consolidated gross profit for the second quarter of 2016 was
$64.2 million, or 27.6% of revenue, up 130 basis points as a percentage of revenue, compared to second quarter 2015 gross profit
of $64.8 million, or 26.3% of revenue.
Consolidated Loss from continuing operations, net of income
taxes for the second quarter of 2016 was $8.3 million representing an improvement of $236.6 million versus the same period prior
year Consolidated Loss from continuing operations, net of income taxes of $244.9 million. The improvement in Consolidated Loss
from continuing operations, net of income taxes resulted from the improved operating performance of the Company in 2016 combined
with the fact that prior year second quarter 2015 included a significant non-cash cost associated with the impairment of goodwill,
which did not recur in 2016 .
Consolidated Adjusted EBITDA from continuing operations for
the second quarter of 2016 was $10.4 million representing an increase of $14.7 million versus the same period prior year Consolidated
Adjusted EBITDA of a negative ($4.4) million. The increase in Consolidated Adjusted EBITDA resulted from the continued operating
improvement initiatives employed by the Company to further reduce operating costs, including reducing bad debt costs as a result
of significantly improved cash collection experience on accounts receivable.
Liquidity and Capital Resources
As of June 30, 2016, the Company had $121.8 million of liquidity,
which consists of $51.4 million of cash and $70.4 of undrawn capacity available on its revolving credit facility. The Company intends
to use $67.5 million of its liquidity in September 2016 to finance and complete the pending acquisition of the business of HS Infusion
Holdings, Inc. (known as "Home Solutions").
The Company's net Days Sales Outstanding ("DSO")
improved to 39 days at June 30, 2016, four days less than the prior year second quarter 2015 DSO of 43 days.
Through the first six months of 2016, the Company's cash
flows from operations represent a net use of cash from operations totaling $15.7 million, significantly lower than the $44.2 million
net use of cash during the same period last year. The $15.7 million use of cash from operations during the first six months of
2016 includes the impact of over $6.0 million in cash used for acquisition and restructuring matters. BioScrip expects to produce
positive cash flow from operating activities over the second half of 2016, excluding the use of cash expected from integration
and transaction costs from closing the Home Solutions acquisition.
As of June 30, 2016 the Company is in full compliance with its
bank covenants under the terms of the Amended Credit Facility.
Update on Home Solutions Acquisition
As announced in June 2016, BioScrip entered into an agreement
to acquire the business of Home Solutions. The acquisition is expected to generate $14 million to $17 million of annual operating
cost reduction synergies within 12 to 18 months following the closing. The transformational transaction is expected to be accretive
to BioScrip stockholders and drive significant benefits for all stakeholders. Furthermore, we expect the acquisition to strengthen
the Company's balance sheet and its leverage profile, thereby improving BioScrip's strategic flexibility and competitive
positioning, and realigning the Company as a growth platform in the attractive post-acute care segment.
The Home Solutions acquisition is expected to be completed in
September 2016; the Company expects to hold a Special Meeting of Stockholders in early September 2016 to approve the transaction
and amend the Company's Certificate of Incorporation to permit an increase in the amount of common stock the Company is authorized
FY 2016 Guidance Update
BioScrip is updating its financial guidance for full year 2016
as disclosed in the chart below. BioScrip's updated guidance includes the expected revenue and Adjusted EBITDA contribution
of Home Solutions following closing of the transaction and reflects a nominal amount of the $14 million to $17 million of annual
operating cost reduction synergies anticipated to be achieved within 12 to 18 months following completion of the acquisition. BioScrip
expects to deliver annual run rate Adjusted EBITDA in the mid-$60 million range by the conclusion of 2016, which reflects only
a small portion of the anticipated $14 million to $17 million of synergies.
The updated guidance range also reflects temporary timing delays
on the realization of ongoing operating cost reductions and revenue mix improvement initiatives, primarily as a result of a shift
in corporate resources used to focus on transaction diligence and planning for the successful integration of the Home Solutions
| Full Year 2016 | ||||||||
| (dollars in millions, except EPS) | Low | High | ||||||
| Revenues | $ | 940.0 | $ | 960.0 | ||||
| Adjusted EBITDA | 45.0 | 50.0 | ||||||
| adjusted ebitda margin | 4.8 | % | 5.2 | % | ||||
| Stock Compensation | 5.2 | 4.8 | ||||||
| Depreciation & Amortization | 18.0 | 17.0 | ||||||
| Interest Expense, net | 39.0 | 37.0 | ||||||
| Acquisition, Integration, and Restructuring Costs | 18.5 | 17.0 | ||||||
| Income Tax (Benefit) | 0.5 | (0.5 | ) | |||||
| Preferred Stock Dividends | 9.2 | 9.1 | ||||||
| Net Loss - Continuing Ops | $ | (45.4 | ) | $ | (34.4 | ) | ||
| weighted average diluted shares | 95.0 | 91.0 | ||||||
| Diluted Loss Per Common Share | $ | (0.48 | ) | $ | (0.38 | ) |
Conference Call and Presentation
BioScrip will host a conference call and live webcast today,
August 8, 2016, at 9:00 a.m. Eastern Daylight Time, to discuss its second quarter 2016 financial results. Interested parties may
participate by dialing 888-372-9592 (US) or 918-559-5628 (International) or by accessing a link on the Company's website at www.bioscrip.com.
A replay of the conference call will be available for two weeks
after the call's completion by dialing 855-859-2056 (US) or 404-537-3406 (International) and entering conference call ID number
51653511. An audio webcast and archive will also be available for 30 days under the "Investor Relations" section of the
About BioScrip, Inc.
BioScrip, Inc. is a leading national provider of infusion and
home care management solutions. BioScrip partners with physicians, hospital systems, skilled nursing facilities, healthcare payors,
and pharmaceutical manufacturers to provide patients access to post-acute care services. BioScrip operates with a commitment to
bring customer-focused pharmacy and related healthcare infusion therapy services into the home or alternate-site setting. By collaborating
with the full spectrum of healthcare professionals and the patient, BioScrip provides cost-effective care that is driven by clinical
excellence, customer service, and values that promote positive outcomes and an enhanced quality of life for those it serves.
Forward-Looking Statements - Safe Harbor
This press release includes statements that may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including projections of certain measures
of the Company's results of operations, projections of future levels of certain charges and expenses, and other statements regarding
the Company's financial improvement plan and strategy. 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," "outlook,"
"aim," "intend," "plan," "believe," "predict," "potential," "continue"
or comparable terms. Because such statements inherently involve risks and uncertainties, actual future results may differ materially
from those expressed or implied by such forward-looking statements. Investors are cautioned that any such forward-looking statements