BioScrip Reports First Quarter 2019 Financial Results
First Quarter 2019 Highlights
- Net revenue of
$179.0 million , up 6.2% compared to$168.6 million in the first quarter of 2018. - Net revenue up 7.8% on a billing day rate basis; there was one less billing day in the first quarter of 2019 as compared to the first quarter of 2018.
- Net loss from continuing operations of
$10.3 million , compared to$13.0 million in the prior year quarter. - Adjusted EBITDA of
$7.1 million , up 25.6% compared to$5.6 million in the prior year quarter, despite$4.5 million of increased bad debt expense in the current year quarter. - Net cash used in operating activities of
$6.6 million , reflecting$7.0 million of operational cash flow and$13.6 million of interest payments, including a bi-annual bond interest payment of$8.9 million . - Liquidity of
$5.7 million atMarch 31, 2019 , consisting of cash and cash equivalents.
Mr. Greenleaf continued, “The merger transaction with Option Care continues to proceed on plan, and we filed the preliminary merger proxy statement earlier this week, highlighting the earnings power of the pro forma combined company. We remain incredibly enthusiastic about the strategic and financial virtues of this combination, which will create the nation’s leading independent national provider of home infusion services.”
Financial Guidance and Conference Call
Given the pending combination with Option Care, the Company will not be providing
ADDITIONAL INFORMATION AND WHERE TO FIND IT
On
PARTICIPANTS IN THE SOLICITATION
The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from stockholders in connection with the matters discussed above. Information about the Company’s directors and executive officers is set forth in the Proxy Statement on Schedule 14A for the Company’s 2019 annual meeting of stockholders, which was filed with the
About
Investor Contacts | |
Stephen Deitsch | Kalle Ahl, CFA |
Chief Financial Officer & Treasurer | The Equity Group |
T: (720) 697-5200 | T: (212) 836-9614 |
stephen.deitsch@bioscrip.com | kahl@equityny.com |
Forward-Looking Statements – Safe Harbor
This communication, in addition to historical information, contains “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995) regarding, among other things, future events or the future financial performance of
Many of these risks, uncertainties and assumptions are beyond BioScrip’s ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, forward-looking statements speak only as of the information currently available to the parties on the date they are made, and neither
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, pre-merger 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 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands) | |||||||
March 31, 2019 | December 31, 2018 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 5,703 | $ | 14,539 | |||
Restricted cash | 4,322 | 4,321 | |||||
Accounts receivable, net | 120,824 | 114,864 | |||||
Inventory | 27,470 | 26,689 | |||||
Prepaid expenses and other current assets | 12,766 | 14,292 | |||||
Total current assets | 171,085 | 174,705 | |||||
Property and equipment, net of accumulated depreciation of $103,866 and $100,851 as of March 31, 2019 and December 31, 2018, respectively | 27,798 | 28,788 | |||||
Goodwill | 367,198 | 367,198 | |||||
Deferred taxes | 1,026 | 1,032 | |||||
Intangible assets, net of accumulated amortization of $50,640 and $49,080 as of March 31, 2019 and December 31, 2018, respectively | 8,910 | 10,470 | |||||
Operating lease right-of-use assets | 19,454 | — | |||||
Other non-current assets | 1,719 | 1,745 | |||||
Total assets | $ | 597,190 | $ | 583,938 | |||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities | |||||||
Current portion of long-term debt | $ | 4,536 | $ | 3,179 | |||
Current portion of operating lease liabilities | 5,312 | — | |||||
Accounts payable | 77,458 | 67,025 | |||||
Amounts due to plan sponsors | 848 | 956 | |||||
Accrued interest | 2,219 | 6,706 | |||||
Accrued expenses and other current liabilities | 25,215 | 29,450 | |||||
Total current liabilities | 115,588 | 107,316 | |||||
Long-term debt, net of current portion | 506,719 | 501,495 | |||||
Operating lease liabilities, net of current portion | 19,234 | — | |||||
Other non-current liabilities | 15,745 | 25,842 | |||||
Total liabilities | 657,286 | 634,653 | |||||
Series A convertible preferred stock, $.0001 par value | 3,337 | 3,231 | |||||
Series C convertible preferred stock, $.0001 par value | 92,909 | 90,058 | |||||
Stockholders’ deficit | |||||||
Preferred stock, $.0001 par value | — | — | |||||
Common stock, $.0001 par value | 13 | 13 | |||||
Treasury stock, shares at cost | (1,336 | ) | (950 | ) | |||
Additional paid-in capital | 616,467 | 618,137 | |||||
Accumulated deficit | (771,486 | ) | (761,204 | ) | |||
Total stockholders’ deficit | (156,342 | ) | (144,004 | ) | |||
Total liabilities and stockholders’ deficit | $ | 597,190 | $ | 583,938 | |||
Schedule 2
BIOSCRIP, INC. AND SUBSIDIARIES | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(in thousands, except per share amounts) | |||||||
Three Months Ended March 31, |
|||||||
2019 | 2018 | ||||||
Net revenue | $ | 178,956 | $ | 168,584 | |||
Cost of revenue (excluding depreciation expense) | 121,292 | 113,536 | |||||
Gross profit | 57,664 | 55,048 | |||||
Percentage of net revenue | 32.2 | % | 32.7 | % | |||
Operating expenses: | |||||||
Service location operating expenses | 40,187 | 39,299 | |||||
General and administrative expenses | 11,493 | 10,669 | |||||
Depreciation and amortization expense | 5,073 | 6,486 | |||||
Restructuring, acquisition, integration, and other expenses | 6,021 | 1,882 | |||||
Total operating expenses | 62,774 | 58,336 | |||||
Operating loss | (5,110 | ) | (3,288 | ) | |||
Other expense: | |||||||
Interest expense, net | 15,231 | 13,395 | |||||
Change in fair value of equity linked liabilities | (9,999 | ) | (3,439 | ) | |||
Gain on dispositions | (76 | ) | (305 | ) | |||
Total other expense | 5,156 | 9,651 | |||||
Loss from continuing operations before income taxes | (10,266 | ) | (12,939 | ) | |||
Income tax expense | (16 | ) | (48 | ) | |||
Loss from continuing operations | (10,282 | ) | (12,987 | ) | |||
Loss from discontinued operations, net of income taxes | — | (30 | ) | ||||
Net loss | (10,282 | ) | (13,017 | ) | |||
Accrued dividends on preferred stock | (2,957 | ) | (2,657 | ) | |||
Loss attributable to common stockholders | $ | (13,239 | ) | $ | (15,674 | ) | |
Basic loss per share: | |||||||
Loss from continuing operations | $ | (0.10 | ) | $ | (0.12 | ) | |
Loss from discontinued operations | — | — | |||||
Basis loss per share | $ | (0.10 | ) | $ | (0.12 | ) | |
Diluted loss per share: | |||||||
Loss from continuing operations | $ | (0.18 | ) | $ | (0.15 | ) | |
Loss from discontinued operations | — | — | |||||
Diluted loss per share | $ | (0.18 | ) | $ | (0.15 | ) | |
Weighted average number of common shares outstanding: | |||||||
Basic | 128,108 | 127,772 | |||||
Diluted | 131,358 | 130,437 | |||||
Schedule 3
BIOSCRIP, INC. AND SUBSIDIARIES | |||||||
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three Months Ended March 31, |
|||||||
2019 | 2018 | ||||||
Loss from continuing operations | $ | (10,282 | ) | $ | (12,987 | ) | |
Interest expense, net | (15,231 | ) | (13,395 | ) | |||
Gain on dispositions | 76 | 305 | |||||
Income tax expense | (16 | ) | (48 | ) | |||
Depreciation and amortization expense | (5,073 | ) | (6,486 | ) | |||
Stock-based compensation | (1,095 | ) | (556 | ) | |||
Change in fair value of equity linked liabilities | 9,999 | 3,439 | |||||
Restructuring, acquisition, integration, and other expenses (1) | (6,021 | ) | (1,882 | ) | |||
Adjusted EBITDA | $ | 7,079 | $ | 5,636 | |||
(1) Restructuring, acquisition, integration, and other expenses include non-recurring costs associated with restructuring, acquisition, and integration initiatives such as employee severance costs, certain legal and professional fees, training costs, redundant wage costs, and other costs related to contract terminations and closed branches/offices. | |||||||
Schedule 4
BIOSCRIP, INC. AND SUBSIDIARIES | |||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in thousands) | |||||||
Three Months Ended March 31, |
|||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (10,282 | ) | $ | (13,017 | ) | |
Less: Loss from discontinued operations, net of income taxes | — | (30 | ) | ||||
Loss from continuing operations | (10,282 | ) | (12,987 | ) | |||
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | |||||||
Depreciation and amortization | 5,073 | 6,486 | |||||
Amortization of operating lease right-of-use assets | 1,412 | — | |||||
Amortization of deferred financing costs and debt discount | 2,054 | 2,023 | |||||
Change in fair value of equity linked liabilities | (9,999 | ) | (3,439 | ) | |||
Change in deferred income taxes | 6 | 31 | |||||
Stock-based compensation | 1,095 | 556 | |||||
Paid-in-kind interest capitalized as principal on Second Lien Note Facility | 4,097 | — | |||||
Gain on dispositions | (76 | ) | (305 | ) | |||
Changes in assets and liabilities | |||||||
Accounts receivable | (5,960 | ) | (2,663 | ) | |||
Inventory | (781 | ) | (3,505 | ) | |||
Prepaid expenses and other assets | 1,627 | 8,807 | |||||
Operating lease liabilities | (1,370 | ) | — | ||||
Accounts payable | 10,433 | 2,872 | |||||
Amounts due to plan sponsors | (108 | ) | (969 | ) | |||
Accrued interest | (4,487 | ) | (4,487 | ) | |||
Accrued expenses and other liabilities | 657 | 2,418 | |||||
Net cash used in operating activities from continuing operations | (6,609 | ) | (5,162 | ) | |||
Net cash used in operating activities from discontinued operations | — | (30 | ) | ||||
Net cash used in operating activities | (6,609 | ) | (5,192 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment, net | (1,921 | ) | (2,646 | ) | |||
Net cash used in investing activities | (1,921 | ) | (2,646 | ) | |||
Cash flows from financing activities: | |||||||
Repayments of finance leases | (172 | ) | (967 | ) | |||
Net activity from exercises of employee stock awards | (133 | ) | (300 | ) | |||
Net cash used in financing activities | (305 | ) | (1,267 | ) | |||
Net change in cash, cash equivalents and restricted cash | (8,835 | ) | (9,105 | ) | |||
Cash, cash equivalents and restricted cash - beginning of period | 18,860 | 44,407 | |||||
Cash, cash equivalents and restricted cash - end of period | $ | 10,025 | $ | 35,302 |
Source: BioScrip, Inc.