Full Press Release Details
Chief Financial Officer
BioScrip Reports Third Quarter 2016 Financial
Q3 Consolidated Revenue of $224.5 Million,
Loss from continuing operations, net of
income taxes of $(11.1) Million and Adjusted EBITDA of $3.5 Million
DENVER, CO, November 7, 2016 - BioScrip, Inc. (NASDAQ:
BIOS) ("BioScrip" or the "Company") today announced financial results for the third quarter 2016. For the
third quarter, the Company reported revenue from continuing operations of $224.5 million, net loss from continuing operations of
($11.1) million and diluted EPS of ($0.12) loss per share.
Third Quarter Highlights
Daniel E. Greenleaf, President and Chief Executive Officer stated,
"I have just completed my first few weeks with the Company and based on my initial review it is clear we have work ahead
of us. We are acutely focused on continuing to improve our operating processes and deliver on our financial commitments. I believe
there is tremendous opportunity at the Company for improved financial performance over the next 18 months. I have made it clear
to my leadership team and to the overall organization that the top five priorities that we must deliberately execute upon are driving
profitable growth, delivering customer-centric service excellence, enhancing employee effectiveness, optimizing operational efficiencies,
and exceeding cash collection targets. Executing upon these five priorities drove the tremendous financial successes and increases
to shareholder value at Coram and later at Home Solutions and I am confident that they will drive similar outcomes at BioScrip."
Furthermore, Mr. Greenleaf commented on the company's
third quarter financial results stating, "We do not believe our third quarter financial results are indicative of the financial
capability of the company and what we will achieve going forward. We have already implemented a number of cost reductions and performance
changes at the Company in late September and October. Those implemented changes include a substantive workforce reduction to enhance
our cost structure, renegotiated supply chain arrangements to improve gross margins and re-alignment of our sales organization
which will result in core revenue growth. We are confident these recent adjustments will be beneficial to our fourth quarter financial
results and will serve to help form a solid base for our continued restructuring and financial performance in 2017."
The Company reconfirms its plan to achieve between $14 million
to $17 million in Home Solutions cost synergies over the next 12 to 18 months. Additionally, the Company is in the process of finalizing
its evaluation of an incrementally larger amount of additional synergies over and above the $14 million to $17 million of synergies
initially identified which we also believe may be achievable as incremental additional cost savings over the next 12 to 18 months.
Results of Operations
Third Quarter 2016 versus Prior Year Third Quarter 2015
Revenue from continuing operations for the third quarter of
2016 was $224.5 million, compared to $247.2 million in the third quarter of 2015, a decrease of $22.7 million or 9.2%. This revenue
decrease was due in part to lower than expected core sales volumes and in part the result of the Company's previously announced
shift in its revenue mix to a greater percentage of core infusion revenue and less lower-margin chronic infusion revenue.
Consolidated gross profit for the third quarter of 2016 was
$62.6 million, or 27.9% of revenue, up 150 basis points as a percentage of revenue, compared to the prior year third quarter 2015
gross profit of $65.2 million, or 26.4% of revenue. The improvement in gross profit percentage was the result of the improved revenue
Consolidated Loss from continuing operations, net of income
taxes for the third quarter of 2016 was $11.1 million, representing an improvement of $13.4 million versus the same period prior
year Consolidated Loss from continuing operations, net of income taxes of $24.5 million. The year over year change was due to higher
operating expenses in the third quarter of 2016, offset by the prior year third quarter 2015 non-cash goodwill impairment charge,
which did not recur in 2016.
Consolidated Adjusted EBITDA from continuing operations for
the third quarter of 2016 was $3.5 million, representing an decrease of $2.5 million versus the same period prior year Consolidated
Adjusted EBITDA of $6.0 million. The decrease in Consolidated Adjusted EBITDA resulted from lower than expected core revenues and
larger than expected year over year operating expenses incurred during the third quarter of 2016.
2016 Guidance Update and Preliminary Guidance for 2017
In light of the Company's third quarter results, the ongoing
integration work the Company is undertaking associated with the Home Solutions acquisition, and the Company's new leadership,
which has led to a comprehensive assessment of all operating processes, the Company is lowering the prior financial guidance as
to the full year 2016 and the fourth quarter 2016 that it previously provided on August 8, 2016. The updated full year 2016 guidance
is revenues in the range of $928 million to $934 million and adjusted EBITDA in the range of $27 million to $29 million.
The Company is also providing preliminary guidance for full
year 2017. The full year 2017 guidance is preliminary in nature and subject to change given the new management team's comprehensive
assessment of all operating processes which is currently underway. Following the completion of this comprehensive assessment process
the Company will further update the preliminary 2017 guidance. The preliminary full year 2017 guidance is revenues in the range
of $940 million to $980 million and adjusted EBITDA in the range of $50 million to $60 million.
Liquidity and Capital Resources
As of September 30, 2016, the Company had $34.2 million of liquidity,
which consists of $2.8 million of cash and $31.4 million of undrawn capacity available on its revolving credit facility.
The Company's net Days Sales Outstanding ("DSO")
was 42 days at September 30, 2016, consistent with the year ago third quarter 2015 net DSO.
Through the first nine months of 2016, the Company's cash
flows from operations represent a net use of cash from operations totaling $32.5 million, significantly lower than the $70.7 million
net use of cash during the same period last year. The $32.5 million use of cash from operations during the first nine months of
2016 includes the impact of over $8.3 million in cash used for acquisition and restructuring matters.
As of September 30, 2016 the Company is in full compliance with
its bank covenants under the terms of the Amended Credit Agreement. We anticipate we will not comply with the more restrictive
debt leverage covenant that will apply in the Amended Credit Agreement beginning in 2017. We are proactively working with our lenders
and evaluating options for maintaining compliance, including further amending our Amended Credit Agreement.
Conference Call and Presentation
BioScrip will host a conference call and live webcast, November
8, 2016, at 11:00 a.m. Eastern Time, to discuss its third quarter 2016 financial results. Interested parties may participate by
dialing 888-372-9592 (US) 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) and entering conference call ID number 1061955. An audio webcast and archive
will also be available for 30 days under the "Investor Relations" section of the Company's website.
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 the statements regarding
2016 and preliminary 2017 guidance, projections of certain measures of the Company's results of operations, projections of future
levels of certain charges and expenses, expectations of Home Solutions cost synergies 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
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 actual results to differ
materially from those in the forward-looking statement include but are not limited to risks associated with: the Company's