BioScrip Reports First Quarter 2018 Financial Results
May 10 2018 - 8:30AM
BioScrip, Inc. (NASDAQ:BIOS) ("BioScrip" or the "Company"), the
largest independent national provider of infusion and home care
management solutions, today announced its first quarter 2018
financial results.
First Quarter 2018
Highlights
- Net revenue of $168.6 million, including core product mix of
75.4%, compared to 71.9% in the prior year quarter, including the
impact of the implementation of ASC 606* in the first quarter of
2018, which resulted in the recognition of amounts previously
reported as bad debt expense as a reduction to revenue
- Net revenues, primarily for antibiotics therapies that carry
higher than average gross profit margins, were negatively impacted
by an estimated $2.5 million during the first quarter of 2018, due
to temporary closures of the Company’s branches resulting from
inclement winter weather
- Cost of revenue for the quarter included additional product
acquisition and delivery costs of approximately $1.0 million
related to temporary product shortages
- Net loss from continuing operations of $13.0 million, a $6.4
million improvement compared to the prior year quarter
- Adjusted EBITDA of $5.6 million, 16% above the prior year
quarter, driven by a 530 basis point improvement in gross profit
margin and a $3.6 million reduction in operating expenses, compared
to the prior year quarter reflecting ASC 606 pro forma
adjustments
- Net cash used in operating activities of $5.2 million,
reflecting $8.9 million of operational and working capital
improvements over the prior year quarter, and $15.9 million of
interest payments, including a bi-annual bond interest payment of
$8.8 million
- Liquidity of $40.4 million at March 31, 2018, consisting of
$30.4 million of cash and equivalents and $10.0 million of senior
credit facility availability, compared to $16.0 million at March
31, 2017
“BioScrip’s first quarter adjusted EBITDA
increased 16% year over year, as we continued to execute
successfully on our turnaround strategy. Our teammates
navigated significant weather-related branch closures and temporary
product shortages, which resulted in lower revenue and increased
cost of revenue during the quarter,” said Daniel E. Greenleaf,
President and Chief Executive Officer. “We also made important
investments in our field force, managed care team, and other
strategic initiatives, as we continue to position our business for
growth and further earnings expansion. We look forward to
accelerating core revenue and gross profit margin expansion as we
proceed into the seasonally stronger second half of the year.
We remain as enthusiastic as ever about BioScrip’s unique position
as the only independent national home infusion pure play, and are
reaffirming our 2018 adjusted EBITDA guidance of between $54
million and $58 million, and updating our 2018 revenue guidance to
between $688 million and $698 million, which was only adjusted for
the implementation of ASC 606*.”
* Implementation of ASC 606 during the first
quarter of 2018 resulted in the recognition of amounts previously
recorded as bad debt expense as a reduction to revenue. The impact
of the change in accounting principle reduced both revenue and bad
debt expense by $5.5 million during the quarter. The implementation
of ASC 606 did not impact operating income or Adjusted EBITDA
during the first quarter of 2018, and will not impact operating
income or Adjusted EBITDA on a go-forward basis. The implementation
of ASC 606 also resulted in a reduction of our 2018 revenue
guidance by approximately $22 million, but did not impact 2018
Adjusted EBITDA guidance.
Conference Call and
PresentationBioScrip will host a conference call and live
webcast on May 10, 2018, at 9:00 a.m. Eastern Time, to discuss its
first quarter 2018 financial results. Interested parties may
participate by dialing 877-423-9820 (US) or by accessing a link
under the "Investors" section on the Company's website at
www.bioscrip.com.
An audio webcast and archive will be available
within two hours of the call’s completion under the “Investors"
section of the Company's website.
About BioScrip, Inc.BioScrip,
Inc. is the largest independent national provider of infusion and
home care management solutions, with approximately 2,200 teammates
and nearly 80 service locations across the U.S. BioScrip partners
with physicians, hospital systems, payors, pharmaceutical
manufacturers and skilled nursing facilities 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.
Investor ContactsStephen Deitsch Chief
Financial Officer & TreasurerT: (720)
697-5200stephen.deitsch@bioscrip.com |
|
|
Kalle
Ahl, CFAThe Equity GroupT: (212)
836-9614kahl@equityny.com |
Forward-Looking Statements – Safe
HarborThis 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 guidance, projections of certain measures of
the Company's results of operations, projections of future levels
of certain charges and expenses incremental cost structure
improvements and other statements regarding the Company's financial
improvement plan and strategy and anticipated effects of the Cures
Act. 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 ability to
make principal and interest payments on our debt and unsecured
notes and satisfy the other covenants contained in its debt
agreements; the Company’s ability to grow its core Infusion
revenues; the Company's ability to continue to execute its
financial improvement plan to reduce operating costs and focus its
business on its Infusion Services segment; the Company’s ability to
evaluate opportunities for improvement and implement solutions as
part of its strategic review process; the success of the Company’s
initiatives to mitigate the impact of the Cures Act on its
business; reductions in federal, state and commercial reimbursement
for the Company's products and services; increased government
regulation related to the health care and insurance industries; as
well as the risks described in the Company's periodic filings with
the Securities and Exchange Commission. The Company does not
undertake any duty to update these forward-looking statements after
the date hereof, even though the Company's situation may change in
the future. All of the forward-looking statements herein are
qualified by these cautionary statements.
Note Regarding Use of Non-GAAP Financial
Measures
In addition to reporting financial information in accordance
with generally accepted accounting principles (GAAP), the Company
is also reporting Adjusted EBITDA, which is a non-GAAP financial
measure. Adjusted EBITDA is not a measurement of financial
performance under GAAP and should not be used in isolation or as a
substitute or alternative to net income, operating income or any
other performance measure derived in accordance with GAAP, or as a
substitute or alternative to cash flow from operating activities or
a measure of the Company’s liquidity. In addition, the Company's
definition of Adjusted EBITDA may not be comparable to similarly
titled non-GAAP financial measures reported by other companies.
Adjusted EBITDA, as defined by the Company, represents net income
before net interest expense, income tax expense, depreciation and
amortization, impairment of goodwill, stock-based compensation
expense, and restructuring, integration and other expenses. As part
of restructuring, the Company may incur significant charges such as
the write down of certain long−lived assets, temporary redundant
expenses, retraining expenses, potential cash bonus payments and
potential accelerated payments or terminated costs for certain of
its contractual obligations. Management believes that Adjusted
EBITDA provides useful supplemental information regarding the
performance of BioScrip’s business operations and facilitates
comparisons to the Company’s historical operating results. For a
full reconciliation of Adjusted EBITDA to the most comparable GAAP
financial measure, please see the attachment to this earnings
release.
|
|
Schedule 1 |
|
BIOSCRIP, INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(in thousands) |
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current
assets |
|
|
|
|
Cash and
cash equivalents |
$ |
30,352 |
|
|
$ |
39,457 |
|
|
Restricted cash |
|
4,950 |
|
|
|
4,950 |
|
|
Receivables, less allowance for doubtful accounts of $37,912 as of
December 31, 2017 |
|
88,185 |
|
|
|
85,522 |
|
|
Inventory |
|
41,549 |
|
|
|
38,044 |
|
|
Deferred
taxes |
|
1,066 |
|
|
|
1,098 |
|
|
Prepaid
expenses and other current assets |
|
9,848 |
|
|
|
18,620 |
|
|
Total current assets |
|
175,950 |
|
|
|
187,691 |
|
|
Property and equipment,
net |
|
24,971 |
|
|
|
26,973 |
|
|
Goodwill |
|
367,198 |
|
|
|
367,198 |
|
|
Intangible assets,
net |
|
16,681 |
|
|
|
19,114 |
|
|
Other non-current
assets |
|
2,082 |
|
|
|
2,116 |
|
|
Total assets |
$ |
586,882 |
|
|
$ |
603,092 |
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT |
|
|
|
|
Current
liabilities |
|
|
|
|
Current
portion of long-term debt |
$ |
1,055 |
|
|
$ |
1,722 |
|
|
Accounts
payable |
|
68,835 |
|
|
|
65,963 |
|
|
Amounts
due to plan sponsors |
|
3,652 |
|
|
|
4,621 |
|
|
Accrued
interest |
|
2,219 |
|
|
|
6,706 |
|
|
Accrued
expenses and other current liabilities |
|
27,933 |
|
|
|
26,118 |
|
|
Total current liabilities |
|
103,694 |
|
|
|
105,130 |
|
|
Long-term debt, net of
current portion |
|
480,382 |
|
|
|
478,866 |
|
|
Other non-current
liabilities |
|
18,282 |
|
|
|
21,769 |
|
|
Total liabilities |
|
602,358 |
|
|
|
605,765 |
|
|
|
|
|
|
|
Series A
convertible preferred stock, $.0001 par value; 825,000 shares
authorized; |
|
|
|
|
21,643
and 21,645 shares issued and outstanding as of March 31, 2018 and
December 31, 2017, respectively; and |
|
|
|
|
$2,998
and $2,916 liquidation preference as of March 31, 2018 and December
31, 2017, respectively |
|
2,923 |
|
|
|
2,827 |
|
|
Series C
convertible preferred stock, $.0001 par value; 625,000 shares
authorized; |
|
|
|
|
614,177
shares issued and outstanding; and $86,952 and $84,555
liquidation |
|
|
|
|
preference as of March 31, 2018 and December 31, 2017,
respectively. |
|
81,813 |
|
|
|
79,252 |
|
|
Stockholders'
(deficit) equity |
|
|
|
|
Preferred stock, $.0001 par value; 5,000,000 shares
authorized; no shares issued and |
|
|
|
|
outstanding as of March 31, 2018 and December 31, 2017,
respectively |
|
- |
|
|
|
- |
|
|
Common
stock, $.0001 par value; 250,000,000 shares authorized; 127,793,785
and 127,634,012 |
|
|
|
|
shares
issued and outstanding as of March 31, 2018 and December 31, 2017,
respectively |
|
13 |
|
|
|
13 |
|
|
Treasury
stock, 96,467 and 5,106 shares outstanding, at cost as of March 31,
2018 and |
|
|
|
|
December
31, 2017, respectively. |
|
(354 |
) |
|
|
(16 |
) |
|
Additional paid-in capital |
|
622,657 |
|
|
|
624,762 |
|
|
Accumulated deficit |
|
(722,528 |
) |
|
|
(709,511 |
) |
|
Total stockholders' deficit |
|
(100,212 |
) |
|
|
(84,752 |
) |
|
Total liabilities and stockholders' deficit |
$ |
586,882 |
|
|
$ |
603,092 |
|
|
|
|
|
|
|
|
|
Schedule 2 |
|
BIOSCRIP, INC. AND SUBSIDIARIES |
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
(in thousands, except per share amounts) |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended March 31, |
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
Net
revenue |
|
|
$ |
168,584 |
|
|
$ |
217,810 |
|
|
|
Cost of revenue
(excluding depreciation expense) |
|
|
|
113,536 |
|
|
|
152,936 |
|
|
|
Gross
profit |
|
|
|
55,048 |
|
|
|
64,874 |
|
|
|
% of
revenues |
|
|
|
32.7 |
% |
|
|
29.8 |
% |
|
|
|
|
|
|
|
|
|
|
Other operating
expenses |
|
|
|
39,299 |
|
|
|
44,319 |
|
|
|
Bad debt expense |
|
|
|
- |
|
|
|
7,042 |
|
|
|
General and
administrative expenses |
|
|
|
10,669 |
|
|
|
9,266 |
|
|
|
Restructuring,
acquisition, integration, and other expenses, net |
|
|
|
1,882 |
|
|
|
3,223 |
|
|
|
Change in fair value of
equity linked liabilities |
|
|
|
(3,439 |
) |
|
|
- |
|
|
|
Depreciation and
amortization expense |
|
|
|
6,486 |
|
|
|
7,165 |
|
|
|
Interest expense |
|
|
|
13,395 |
|
|
|
12,659 |
|
|
|
Gain on
dispositions |
|
|
|
(305 |
) |
|
|
- |
|
|
|
Loss from continuing
operations, before income
taxes |
|
|
|
(12,939 |
) |
|
|
(18,800 |
) |
|
|
Income
tax expense |
|
|
|
48 |
|
|
|
619 |
|
|
|
Loss from continuing operations, net of income
taxes |
|
|
|
(12,987 |
) |
|
|
(19,419 |
) |
|
|
Loss from
discontinued operations, net of income taxes |
|
|
|
(30 |
) |
|
|
(299 |
) |
|
|
Net loss |
|
|
$ |
(13,017 |
) |
|
$ |
(19,718 |
) |
|
|
Accrued dividends on
preferred stock |
|
|
|
(2,481 |
) |
|
|
(2,214 |
) |
|
|
Deemed dividend on
preferred stock |
|
|
|
(176 |
) |
|
|
(174 |
) |
|
|
Loss
attributable to common stockholders |
|
|
$ |
(15,674 |
) |
|
$ |
(22,106 |
) |
|
|
|
|
|
|
|
|
|
|
Denominator - Basic and
Diluted: |
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding |
|
|
|
127,772 |
|
|
|
118,783 |
|
|
|
|
|
|
|
|
|
|
|
Loss from
continuing operations, basic and diluted |
|
|
$ |
(0.12 |
) |
|
$ |
(0.18 |
) |
|
|
Income from
discontinued operations, basic and diluted |
|
|
|
- |
|
|
|
- |
|
|
|
Loss per common
share, basic and diluted |
|
|
$ |
(0.12 |
) |
|
$ |
(0.18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 3 |
|
BIOSCRIP, INC. AND SUBSIDIARIES |
|
QUARTERLY
RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
3/31/2018 |
|
3/31/2017 |
|
|
|
|
|
|
|
|
|
Loss from
continuing operations, net of income taxes |
|
|
(12,987 |
) |
|
|
(19,419 |
) |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(13,395 |
) |
|
|
(12,659 |
) |
|
|
Gain on
dispositions |
|
|
305 |
|
|
|
- |
|
|
|
Income tax expense |
|
|
(48 |
) |
|
|
(619 |
) |
|
|
Depreciation and
amortization expense |
|
|
(6,486 |
) |
|
|
(7,165 |
) |
|
|
Stock-based
compensation expense |
|
|
(556 |
) |
|
|
(594 |
) |
|
|
Change in fair value of
equity linked liabilities |
|
|
3,439 |
|
|
|
- |
|
|
|
Restructuring,
acquisition, integration, and other expenses, net (1) |
|
|
(1,882 |
) |
|
|
(3,223 |
) |
|
|
Consolidated
Adjusted EBITDA |
|
$ |
5,636 |
|
|
$ |
4,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Restructuring, acquisition, integration and other
expenses, net include costs associated with restructuring,
acquisition, and integration initiatives such as employee severance
costs, certain legal and professional fees, redundant wage costs,
impacts recorded from the change in contingent consideration
obligations, and other costs related to contract terminations and
closed locations. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule 4 |
|
BIOSCRIP, INC AND SUBSIDIARIES |
|
CONSOLIDATED CONDENSED CASH FLOWS |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
3/31/2018 |
|
3/31/2017 |
|
Cash flows from
operating activities: |
|
|
|
|
Net loss |
$ |
(13,017 |
) |
|
$ |
(19,718 |
) |
|
Less: Loss from
discontinued operations, net of income taxes |
|
(30 |
) |
|
|
(299 |
) |
|
Loss from continuing
operations, net of income taxes |
|
(12,987 |
) |
|
|
(19,419 |
) |
|
Adjustments to
reconcile net loss from continuing operations, net of income taxes
to net cash used in operating activities: |
|
|
|
|
Depreciation and amortization |
|
6,486 |
|
|
|
7,165 |
|
|
Amortization of deferred financing costs and debt discount |
|
2,023 |
|
|
|
1,318 |
|
|
Change in
fair value of equity linked liabilities |
|
(3,439 |
) |
|
|
- |
|
|
Change in
deferred income tax |
|
31 |
|
|
|
619 |
|
|
Compensation under stock-based compensation plans |
|
556 |
|
|
|
521 |
|
|
Gain on
dispositions |
|
(305 |
) |
|
|
- |
|
|
Changes
in assets and liabilities: |
|
|
|
|
Receivables |
|
(2,663 |
) |
|
|
2,210 |
|
|
Inventory |
|
(3,505 |
) |
|
|
5,616 |
|
|
Prepaid
expenses and other assets |
|
8,807 |
|
|
|
3,601 |
|
|
Accounts
payable |
|
2,872 |
|
|
|
(10,936 |
) |
|
Amounts
due to plan sponsors |
|
(969 |
) |
|
|
645 |
|
|
Accrued
interest |
|
(4,487 |
) |
|
|
(1,157 |
) |
|
Accrued
expenses and other liabilities |
|
2,418 |
|
|
|
(917 |
) |
|
Net cash
used in operating activities from continuing operations |
|
(5,162 |
) |
|
|
(10,734 |
) |
|
Net cash
used in operating activities from discontinued operations |
|
(30 |
) |
|
|
(299 |
) |
|
Net cash used in operating activities |
|
(5,192 |
) |
|
|
(11,033 |
) |
|
Cash flows from
investing activities: |
|
|
|
|
Purchases
of property and equipment |
|
(2,646 |
) |
|
|
(1,684 |
) |
|
Net cash used in investing activities |
|
(2,646 |
) |
|
|
(1,684 |
) |
|
Cash flows from
financing activities: |
|
|
|
|
Proceeds
from priming credit agreement, net |
|
- |
|
|
|
23,060 |
|
|
Proceeds
from private issuances, net |
|
- |
|
|
|
5,052 |
|
|
Borrowings on revolving credit facility |
|
- |
|
|
|
563 |
|
|
Repayments on revolving credit facility |
|
- |
|
|
|
(1,000 |
) |
|
Principal
payments of long-term debt |
|
- |
|
|
|
(3,137 |
) |
|
Repayments of capital leases |
|
(967 |
) |
|
|
(238 |
) |
|
Net
activity from exercises of employee stock awards |
|
(300 |
) |
|
|
(51 |
) |
|
Net cash (used in) provided by financing
activities |
|
(1,267 |
) |
|
|
24,249 |
|
|
Net change in cash and
cash equivalents |
|
(9,105 |
) |
|
|
11,532 |
|
|
Cash, cash
equivalents, and restricted cash - beginning of
period |
|
44,407 |
|
|
|
9,569 |
|
|
Cash, cash
equivalents, and restricted cash - end of period |
$ |
35,302 |
|
|
$ |
21,101 |
|
|
|
|
|
|
|
Schedule
5 |
|
|
|
|
BIOSCRIP, INC AND SUBSIDIARIES |
FULL YEAR 2018
GUIDANCE |
(dollars and shares in millions) |
|
Low
End |
|
High
End |
|
of
Range |
|
of
Range |
|
|
|
|
Revenues |
$ |
688.0 |
|
|
$ |
698.0 |
|
|
|
|
|
Loss from continuing operations, net of income tax |
|
(51.9 |
) |
|
|
(43.4 |
) |
|
|
|
|
Stock
Compensation |
|
5.4 |
|
|
|
4.9 |
|
Depreciation
& Amortization |
|
27.0 |
|
|
|
26.0 |
|
Interest Expense,
net |
|
55.0 |
|
|
|
54.0 |
|
Restructuring
Costs |
|
6.0 |
|
|
|
5.0 |
|
Income Tax
Expense |
|
2.0 |
|
|
|
1.0 |
|
Preferred Stock
Dividends |
|
10.5 |
|
|
|
10.5 |
|
Adjusted EBITDA |
$ |
54.0 |
|
|
$ |
58.0 |
|
Adjusted EBITDA
Margin |
|
7.8 |
% |
|
|
8.3 |
% |
|
|
|
|
Diluted Loss Per Common
Share |
$ |
(0.41 |
) |
|
$ |
(0.34 |
) |
|
|
|
|
Weighted-Average
Diluted Shares |
|
128.0 |
|
|
|
128.0 |
|
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