Full Press Release Details
In-Site Communications, Inc.
ANNOUNCES STEPS TO ENHANCE SHAREHOLDER VALUE
Implementing $35 Million - $40 Million
in Total Cost Savings Over the Next 12 Months to
Improve Financial Performance and Increase
Takes Steps to Enhance Liquidity and
Provides Full Year 2016 EBITDA Guidance
of $50 - $60 million on Revenues of $730 - $760 million
Announces Sale of Non-Core PBM Business
Retains Jefferies to Explore Strategic
Names Chris Luthin as Chief Operating
Officer; Engages Scott Davido as Chief Implementation Officer and Announces Additional Executive Appointments
ELMSFORD, NY - August 10, 2015 - BioScrip,
Inc. (NASDAQ: BIOS) ("BioScrip" or the "Company") today announced a multi-step plan to enhance shareholder
value, improve financial flexibility and position BioScrip as a pure play infusion services company focused on high-growth services.
The BioScrip Board of Directors has formed a committee that will be chaired by R. Carter Pate that is tasked with overseeing the
implementation and execution of this plan.
BioScrip also announced today that, while the Company implements
its financial improvement plan, the Board of Directors has authorized a process to concurrently explore a range of strategic alternatives
and has retained Jefferies LLC as its financial advisor to assist in the process.
Michael Goldstein, Chair of the Governance, Compliance and Nominating
Committee of the BioScrip Board of Directors said, "BioScrip has a strengthened Board of Directors comprising seven directors,
six of whom are independent and four of whom were added since March 2015. The new members include persons with industry, operations
and financial turnaround experience. We are operating with a sense of urgency. We are highly committed to the successful turnaround
of BioScrip and taking an active role in overseeing the Company's operations and cost reduction initiatives to improve the
operating performance and cash flow of the Company. We have also taken steps to strengthen the executive team, and look forward
to working closely together to effect meaningful change and drive shareholder value."
Rick Smith, President and Chief Executive Officer of BioScrip,
said, "Our Board and management team are committed to taking immediate and rapid action to streamline the Company. Once complete,
BioScrip will be a pure play infusion services provider focused on the higher-growth core infusion business. Importantly, we remain
committed to continuing to provide high quality care and clinical service to patients."
Cost Savings and Financial Improvement Initiatives to Create
BioScrip has updated the previously announced net savings it
had targeted to achieve in 2015. As part of its financial improvement plan, the Company now expects $35 million - $40 million
in annualized net cost savings to be realized over the next 12 months. For the full year 2016 the Company is providing EBITDA guidance
of between $50 million - $60 million. Expected revenues for full year 2016 are projected to be between $730 million -
The $35 million - $40 million in annualized net cost savings
include savings as part of the 2015 cost reduction plan. Savings are expected to come from several areas, including:
BioScrip has received an amendment to its senior credit facility
to adjust its covenants for the actions it is announcing today. The amendment allows for greater flexibility on leverage covenants
through early 2017 to implement and execute its financial improvement plan.
Non-Core Asset Divestitures
BioScrip also announced today that it has entered into an asset
purchase agreement to sell its non-core PBM business to ProCare Pharmacy Benefit Manager Inc., a privately held pharmacy benefit
manager and part of the ProCare Rx companies, for $25 million in cash. The PBM transaction is expected to close in the third quarter,
subject to customary closing conditions. Proceeds are projected to be used to pay down debt and support working capital needs.
The PBM activities represent approximately $66 million of annual revenue. SunTrust Robinson Humphrey acted as financial advisor
and Polsinelli PC acted as legal advisor to BioScrip in connection with this transaction.
In addition, the Company is pursuing the divestiture of certain
other non-core assets and will update the market, as appropriate.
Exploration of Strategic Alternatives
The Company will pursue its financial improvement plan and
will also, with the assistance of its financial advisor, review a range of strategic alternatives, which could include, among
other things, a sale of other non-core assets, transitioning chronic therapies to alliance partners or a potential sale or merger
Mr. Smith continued, "As we execute on our financial improvement
plan to drive liquidity and improve our results, the Board believes it is prudent to conduct a comprehensive strategic alternatives
review process on a parallel path to ensure that we identify any and all opportunities to deliver value for shareholders."
BioScrip noted that the exploration of strategic alternatives
will not necessarily result in any changes to the Company's current business plan and financial improvement plan or any transactions
or agreements. The Company does not intend to disclose developments regarding the exploration of strategic alternatives unless
and until a final decision is made.
Strengthened Board and New Executive Leadership Team
The Company noted that its Board will be taking an active role
to implement the necessary changes and is confident that the company has the right leadership in place. The Board is composed of
seven directors, six of whom are independent and with four of those members appointed since March 2015, adding experience with
healthcare industry operations and financial turnarounds.
The Company has also retained new executive leadership, effective
immediately, to oversee and support the implementation of the Company's operations and financial improvement plan:
In addition, C. Britt Jeffcoat was appointed as Controller and
Chief Accounting Officer in May 2015 and Jeffrey M. Kreger was appointed as the Company's Chief Financial Officer in April
Mr. Pate said, "We have a strong core of executive talent
in place and we are confident in the ability of this team to quickly deliver on our financial improvement initiatives while working
to identify additional opportunities to strengthen our company, drive cash flow and create value for our shareholders."
Executive Biographies
C. Britt Jeffcoat, Vice President, Controller and Chief
Mr. Jeffcoat previously served as Assistant Corporate Controller of JP Energy Partners LP, a NYSE-listed
owner, operator, developer and acquirer of a portfolio of midstream energy assets in the United States. Prior to that, he was
Vice President and Assistant Corporate Controller of Sun Healthcare Group, Inc., a post-acute healthcare services company.
Mr. Jeffcoat holds a bachelor's degree in business administration
from the University of Missouri and a master's degree in accountancy from the University of Missouri. He is a certified public
Jeffrey M. Kreger, Chief Financial Officer
Mr. Kreger has more than 25 years of experience in financial
and executive leadership roles. He most recently served as Senior Vice President of Finance with LHC Group Inc., a NASDAQ-listed
post-acute healthcare services company. In that role, he led a staff of over 300 personnel spanning all aspects of finance, accounting,
treasury and information technology functions. He was instrumental in the development and execution of LHC's five-year strategic
plan, led all corporate financing activities, and was actively involved in corporate development, overseeing the valuation, purchase,
and integration of four large acquisitions in less than 19 months. Prior to joining LHC Group in 2013, Mr. Kreger served as Senior
Vice President and Corporate Controller at Sun Healthcare Group, a NASDAQ-listed post-acute care company with over 200 health care
centers across 46 states and annual revenues in 2011 exceeding $1.9 billion. He previously held senior finance roles at NYSE- and
NASDAQ- listed companies including Consolidated Graphics and Philip Services Corporation. He began his career with an eight-year
term in the audit practice of Ernst & Young.
Mr. Kreger holds a Master of Business Administration degree
from The University of Houston, and a Bachelor in Business Administration degree in Accounting from the University of Texas at
Austin. He is a certified public accountant.
Chris Luthin, Chief Operating Officer
Mr. Luthin has extensive infusion and pharmacy operating expertise,
having started his career in the Caremark Infusion Division and brings more than 25 years of experience to BioScrip. He joined
BioScrip in June after serving as CFO and EVP of Millennium Pharmacy Systems, a long term care pharmacy distribution company with
operations in 5 states, and previously serving in a number of operational and financial roles of progressive responsibility during