UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C.
______________________________________________
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
|
Date
of Report (Date of earliest event reported): March 3,
2009
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|
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BioScrip,
Inc.
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|
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(Exact
Name of Registrant as Specified in its
Charter)
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Delaware
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0-28740
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05-0489664
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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100
Clearbrook Road, Elmsford, New York
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10523
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code (914)
460-1600
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________________________________________________________________________
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12).
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240-14d-2(b)).
¨ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)).
Item
2.02 Results of Operations and Financial Condition.
On March
3, 2009, BioScrip, Inc. issued a press release reporting its earnings for the
fourth quarter and year ended December 31, 2008. A copy of that press
release is furnished with this Current Report on Form 8-K as Exhibit 99.1 and is
incorporated herein by reference.
The press
release includes certain non-GAAP financial measures as described therein. As
required by Regulation G, a reconciliation between any non-GAAP financial
measures presented and the most directly comparable GAAP financial measures is
also provided.
As
provided in General Instruction B.2 to Form 8-K, the information furnished in
this Item 2.02 and in Exhibit 99.1 hereto shall not be deemed "filed" for
purposes of Section 18 of the Securities and Exchange Act of 1934, as amended,
nor shall it be deemed incorporated by reference in any filing with the
Securities and Exchange Commission, except as shall be expressly provided by
specific reference in such filing.
Item 9.01 Financial Statements and
Exhibits.
(c) Exhibits.
The following information is furnished as an exhibit to this Current
Report:
Exhibit
No. Description of
Exhibit
99.1 Press
Release dated March 3, 2009.
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned duly
authorized.
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Date:
March 3, 2009
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BIOSCRIP,
INC.
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By: /s/ Barry A.
Posner
Barry A. Posner, Executive Vice President
Secretary and General Counsel
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NEWS RELEASE
Contact:
Stanley
G. Rosenbaum
Executive
Vice President and Chief Financial Officer
Tel:
952-979-3768
srosenbaum@bioscrip.com
Lisa M.
Wilson
In-Site
Communications
Tel:
(917) 543-9932
lwilson@insitecony.com
FOR
IMMEDIATE RELEASE
BIOSCRIP,
INC. REPORTS 2008 FOURTH QUARTER AND YEAR-END FINANCIAL
RESULTS
--
IMPAIRMENT CHARGE RESULTS IN 4th QUARTER
2008 LOSS OF $1.98 PER SHARE; EARNINGS OF $0.09 PER SHARE EXCLUDING THE
IMPAIRMENT CHARGE
ELMSFORD,
N.Y.--(BUSINESS WIRE)—March 3, 2009—BioScrip, Inc. (Nasdaq: BIOS) today
announced a fourth quarter net loss of $76.6 million, or $1.98 per share, on
revenues of $366.6 million, which includes a goodwill impairment charge and
intangible write off totaling $80.2 million, net of taxes. These
results compare to net income of $2.5 million, or $0.06 per diluted share, on
revenue of $309.2 million for the fourth quarter of
2007. Excluding the goodwill impairment and intangible write
off, the Company would have reported net income of $3.6 million, or $0.09 per
diluted share. EBITDAO was $6.6 million for the fourth quarter,
compared to $5.9 million for the same period a year ago, a 11.9%
increase.
For the
year ended December 31, 2008, the Company reported a net loss of $74.0 million,
or $1.93 per share, on revenues of $1.4 billion, which includes the $80.2
million impairment charge, net of tax. This compares to net income of
$3.3 million, or $0.09 per share, on revenues of $1.2 billion for the same
period a year ago. Excluding the impairment charge and intangible
write off, the Company would have reported 2008 net income of $6.2 million, or
$0.16 per diluted share. The Company’s goodwill impairment and
intangible write off was prompted by adverse equity and other market conditions
which caused a decrease in current market valuations in the healthcare services
industry and BioScrip’s stock price relative to its book value at December 31,
2008.
Richard
H. Friedman, BioScrip’s Chairman and Chief Executive Officer, stated, "Our
operating performance is in-line with our expectations and continues to be
driven by solid organic growth at our specialty pharmacies, demonstrating the
underlying strength and consistency of our business. We strengthened
and expanded our infusion capabilities over the last year and will continue to
focus on strategic growth areas as we increase our national footprint in
2009. We believe that this will yield positive results in
2009.”
Results
of Operations
Fourth
Quarter Highlights
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($'s
in Millions)
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4th Quarter 2008 Actual
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4th Quarter 2007 Actual
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% Change
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|||||||||
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Revenues
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$ | 366.6 | $ | 309.2 | 18.6 | % | ||||||
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Specialty
Services Revenues
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$ | 314.0 | $ | 257.1 | 22.1 | % | ||||||
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Gross
Profit Dollars
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$ | 38.0 | $ | 36.2 | 5.0 | % | ||||||
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Gross
Profit Percent
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10.4 | % | 11.7 | % | -11.1 | % | ||||||
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Operating
Expense Percent*
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9.3 | % | 10.7 | % | 13.1 | % | ||||||
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Operating
Profit*
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$ | 4.0 | $ | 3.1 | 29.0 | % | ||||||
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EBITDAO
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$ | 6.6 | $ | 5.9 | 11.9 | % | ||||||
*Excludes
impairment charge in 4th quarter of 2008.
Revenue
for the fourth quarter of 2008 totaled $366.6 million compared to $309.2 million
for the same period a year ago. Fourth quarter 2008 Specialty
Services revenues were $314.0 million, an increase of $56.9 million, or 22.1%
over the same period a year ago. The increase was due primarily to
growth from managed care and network contracts in conjunction with direct to
physician sales efforts for specialty therapies. PBM Services
revenues remained substantially the same year-over-year.
Consolidated
gross profit for the fourth quarter of 2008 was $38.0 million, an increase of
$1.8 million from $36.2 million for the fourth quarter of
2007. Fourth quarter 2008 gross margin was 10.4% compared to 11.7%
for the same period a year ago. Gross margin was negatively impacted by the
lower margin Medicare Competitive Acquisition Program (“CAP”) and United
Healthcare Group (“UHG”) organ transplant and HIV/AIDS contract. As
previously reported, the CAP relationship ended on December 31, 2008 and the UHG
exclusive agreement for HIV/AIDS and organ transplant terminate January 31, 2009
and March 31, 2009, respectively. Total revenues associated with
those contracts represented an aggregate of approximately $180 million in
2008.
Fourth
quarter operating income, excluding the impairment charge increased to
approximately $4.0 million, a 29% increase over last year’s fourth quarter. This
increase was primarily due to sales growth and cost-containment efforts,
partially offset by a return to normalized bad debt expense.
2
2008
Reported Results
Year-end
2008 Highlights:
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($'s
in Millions)
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2008 Actual
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2007 Actual
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% Change
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|||||||||
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Revenues
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$ | 1,401.9 | $ | 1,197.7 | 17.0 | % | ||||||
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Specialty
Services Revenues
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$ | 1,196.6 | $ | 974.6 | 22.8 | % | ||||||
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Gross
Profit Dollars
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$ | 142.2 | $ | 137.0 | 3.8 | % | ||||||
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Gross
Profit Percent
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10.1 | % | 11.4 | % | -11.4 | % | ||||||
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Operating
Expense Percent*
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9.4 | % | 10.7 | % | 12.1 | % | ||||||
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Operating
Profit*
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$ | 10.4 | $ | 8.9 | 16.9 | % | ||||||
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EBITDAO
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$ | 20.5 | $ | 18.9 | 8.5 | % | ||||||
*Excludes impairment charge in 4th quarter of 2008;
includes 3rd quarter non-recurring settlement of $795,000 with OIG.
For the
year ended December 31, 2008, the Company reported a net loss of $74.0 million,
or $1.93 per share compared to net income of $3.3 million, or $0.09 per share
for the same period a year ago. As discussed above, the Company had
an after-tax impairment charge of $80.2 million, or $2.09 per share, which was
prompted by adverse equity and other market conditions which caused a decrease
in current market valuations in the healthcare services industry and BioScrip’s
stock price relative to its book value at December 31, 2008.
Excluding
the impairment charge, the Company would have reported net income of $6.2
million, or $0.16 per diluted share, a $2.9 million improvement in net income
over the prior year. Revenues increased to $1.4 billion for the year ended
December 31, 2008 from $1.2 billion in 2007. The year-over-year
increase was principally due to growth in Bioscrip’s Specialty Services business
discussed above, partially offset by revenues associated with the loss of PBM
contracts. Specialty Services revenue for the 2008 was $1,196.6
million compared to $974.6 million for 2007, an increase of
$222.0 million, or 22.8%.
Operating
income for 2008 increased 16.9% in 2008 to $10.4 million, excluding the
impairment charge versus 2007. This improvement was
primarily the result of higher Specialty Services sales.
Balance
Sheet Highlights
Accounts
receivable days sales outstanding at December 31, 2008 were 43.8 days,
essentially unchanged over the prior year. Inventory days on hand at
December 31, 2008 were 11.8 days versus 11.4 days at the end of
2007. Inventory on hand increased in the fourth quarter primarily to
safeguard against first quarter 2009 price increases.
3
Outstanding
borrowings under our credit facility were $50.4 million at the end of 2008, a
$4.6 million decline since September 30, 2008. As of yesterday, our
outstanding borrowings were approximately $41.0 million. Average
borrowings during the fourth quarter were approximately $41.0 million, an
improvement of more than $6.0 million over the third quarter of
2008. BioScrip’s total credit line is $85.0 million.
Conference
Call Information
BioScrip
will host a conference call to discuss fourth quarter and year-end 2008
financial results on Tuesday, March 3, at 9:00 a.m. ET (Eastern Time).
Interested parties may participate in the conference call by dialing
800-755-1805 (US), or 212-231-1901 (International), 5-10 minutes prior to the
start of the call. A replay of the conference call will be available from 12:00
p.m. ET on March 3, through 12:00 p.m. ET on March 17, by dialing 800-633-8284
(US), or 402-977-9140 (International), and entering reservation #21414372. An
audio webcast and archive of the conference call will also be available under
the investor relations section of the BioScrip website, www.bioscrip.com.
About
BioScrip, Inc.
BioScrip,
Inc. (www.bioscrip.com) (Nasdaq: BIOS) is a specialty pharmaceutical healthcare
organization that partners with patients, physicians, healthcare payors and
pharmaceutical manufacturers to provide access to medications and management
solutions to optimize outcomes for chronic and other complex health care
conditions.
Forward
Looking Statements-Safe Harbor
This
press release may contain statements which constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding the intent, belief or current expectations of the
Company, its directors, or its officers with respect to the future operating
performance of the Company, 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 such differences are described in the
Company's periodic filings with the Securities and Exchange
Commission.
Earnings
before interest, taxes, depreciation, amortization, and option expense
("EBITDAO") is a non-GAAP financial measure as defined under U.S. Securities and
Exchange Commission Regulation G. As required by Regulation G, BioScrip has
provided on Schedule 3 a reconciliation of this measure to the most comparable
GAAP financial measure. The non-GAAP measure presented provides important
insight into the ongoing operations and a meaningful benchmark to evidence the
Company's continuing profitability trend.
###
TABLES TO
FOLLOW
4
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BIOSCRIP,
INC
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|||||||||
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CONSOLIDATED
BALANCE SHEETS
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|||||||||
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SCHEDULE
1
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|||||||||
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(in
thousands, except for share amounts)
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|||||||||
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December
31,
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December
31,
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||||||||
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2008
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2007
|
||||||||
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ASSETS
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|||||||||
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Current
assets
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|||||||||
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Cash
and cash equivalents
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$ | - | $ | - | |||||
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Receivables,
less allowance for doubtful accounts of $11,629 and
$12,083
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|||||||||
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at
December 31, 2008 and 2007, respectively
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158,649 | 128,969 | |||||||
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Inventory
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45,227 | 33,598 | |||||||
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Prepaid
expenses and other current assets
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2,766 | 1,434 | |||||||
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Total
current assets
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206,642 | 164,001 | |||||||
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Property
and equipment, net
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14,748 | 11,742 | |||||||
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Other
assets
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1,069 | 478 | |||||||
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Goodwill
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24,498 | 114,824 | |||||||
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Intangible
assets, net
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- | 5,777 | |||||||
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Total
assets
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$ | 246,957 | $ | 296,822 | |||||
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LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|||||||||
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Current
liabilities
|
|||||||||
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Line
of credit
|
$ | 50,411 | $ | 33,778 | |||||
|
Accounts
payable
|
76,936 | 57,342 | |||||||
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Claims
payable
|
5,230 | 5,164 | |||||||
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Amounts
due to plan sponsors
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5,646 | 4,568 | |||||||
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Accrued
expenses and other current liabilities
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9,575 | 13,936 | |||||||
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Total
current liabilities
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147,798 | 114,788 | |||||||
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Deferred
taxes
|
533 | 12,754 | |||||||
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Income
taxes payable
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3,089 | 3,077 | |||||||
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Total
liabilities
|
151,420 | 130,619 | |||||||
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Stockholders'
equity
|
|||||||||
|
Common
stock, $.0001 par value; 75,000,000 shares authorized; shares
issued:
|
|||||||||
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41,622,629,
and 41,331,346, respectively; shares outstanding; 38,691,356
and
|
|||||||||
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38,250,633,
respectively
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4 | 4 | |||||||
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Treasury
stock, shares at cost: 2,624,186 and 2,436,642,
respectively
|
(10,288 | ) | (9,399 | ) | |||||
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Additional
paid-in capital
|
248,441 | 244,186 | |||||||
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Accumulated
deficit
|
(142,620 | ) | (68,588 | ) | |||||
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Total
stockholders' equity
|
95,537 | 166,203 | |||||||
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Total
liabilities and stockholders' equity
|
$ | 246,957 | $ | 296,822 | |||||
5
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Schedule
2
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||||||||||||||||
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BIOSCRIP,
INC
|
||||||||||||||||
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CONSOLIDATED
STATEMENTS OF OPERATIONS (1)
|
||||||||||||||||
|
(in
thousands, except per share amounts)
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Three
Months
|
Twelve
Months
|
|||||||||||||||
|
Ended
December 31,
|
Ended
December 31,
|
|||||||||||||||
|
2008
|
2007
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2008
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2007
|
|||||||||||||
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Revenue
|
$ | 366,573 | $ | 309,197 | $ | 1,401,911 | $ | 1,197,732 | ||||||||
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Cost
of revenue
|
328,582 | 273,016 | 1,259,741 | 1,060,717 | ||||||||||||
|
Gross
profit
|
37,991 | 36,181 | 142,170 | 137,015 | ||||||||||||
|
%
of Revenue
|
10.4 | % | 11.7 | % | 10.1 | % | 11.4 | % | ||||||||
|
Operating
expenses
|
||||||||||||||||
|
Selling,
general and administrative expenses
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31,623 | 32,324 | 125,202 | 120,147 | ||||||||||||
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Bad
debt expense
|
1,881 | 314 | 4,667 | 5,119 | ||||||||||||
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Amortization
of intangibles
|
484 | 484 | 1,936 | 2,898 | ||||||||||||
|
Goodwill
and intangible impairment
|
93,882 | - | 93,882 | - | ||||||||||||
|
Total
operating expense
|
127,870 | 33,122 | 225,687 | 128,164 | ||||||||||||
|
%
of Revenue
|
34.9 | % | 10.7 | % | 16.1 | % | 10.7 | % | ||||||||
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(Loss)
income from operations
|
(89,879 | ) | 3,059 | (83,517 | ) | 8,851 | ||||||||||
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Interest
expense, net
|
(780 | ) | (602 | ) | (2,711 | ) | (3,270 | ) | ||||||||
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(Loss)
income before income taxes
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(90,659 | ) | 2,457 | (86,228 | ) | 5,581 | ||||||||||
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Tax
(benefit) provision
|
(14,075 | ) | (59 | ) | (12,196 | ) | 2,264 | |||||||||
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Net
(loss) income
|
$ | (76,584 | ) | $ | 2,516 | $ | (74,032 | ) | $ | 3,317 | ||||||
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Basic
weighted average shares
|
38,589 | 37,991 | 38,417 | 37,647 | ||||||||||||
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Diluted
weighted average shares
|
38,589 | 40,013 | 38,417 | 38,491 | ||||||||||||
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Basic
net (loss) income per share
|
$ | (1.98 | ) | $ | 0.07 | $ | (1.93 | ) | $ | 0.09 | ||||||
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Diluted
net (loss) income per share
|
$ | (1.98 | ) | $ | 0.06 | $ | (1.93 | ) | $ | 0.09 | ||||||
(1)
Cetain amounts have been reclassified to conform to the current
presentation. Such classifications have had no impact on income
from operations or net income.
6
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Schedule
3
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||||||||||||||||
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BIOSCRIP,
INC
|
||||||||||||||||
|
Reconciliation
between GAAP and Non-GAAP Measures
|
||||||||||||||||
|
(in
thousands, except per share amounts)
|
||||||||||||||||
|
(unaudited)
|
||||||||||||||||
|
Three
Months
|
Twelve
Months
|
|||||||||||||||
|
Ended
December 31,
|
Ended
December 31,
|
|||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
(loss) income
|
$ | (76,584 | ) | $ | 2,516 | $ | (74,032 | ) | $ | 3,317 | ||||||
|
Addback
items:
|
||||||||||||||||
|
Amortization
of intangibles
|
484 | 484 | 1,936 | 2,898 | ||||||||||||
|
Depreciation
|
1,223 | 1,081 | 4,457 | 4,192 | ||||||||||||
|
Net
interest
|
780 | 602 | 2,711 | 3,270 | ||||||||||||
|
Taxes
|
(14,075 | ) | (59 | ) | (12,196 | ) | 2,264 | |||||||||
|
Stock-based
compensation expense
|
931 | 1,269 | 3,790 | 3,004 | ||||||||||||
|
Goodwill
and intangible writeoff
|
93,882 | - | 93,882 | - | ||||||||||||
|
Earnings
before interest, taxes, depreciation, amortization and
|
||||||||||||||||
|
share-based
compensation expense (EBITDAO)
|
$ | 6,641 | $ | 5,893 | $ | 20,548 | $ | 18,945 | ||||||||
|
Net
(loss) income
|
$ | (76,584 | ) | $ | 2,516 | $ | (74,032 | ) | $ | 3,317 | ||||||
|
Addback
items:
|
||||||||||||||||
|
OIG
Settlement
|
- | - | 795 | - | ||||||||||||
|
Pro
forma Net (Loss) Income
|
$ | (76,584 | ) | $ | 2,516 | $ | (73,237 | ) | $ | 3,317 | ||||||
|
Basic
weighted average shares
|
38,589 | 37,991 | 38,417 | 37,647 | ||||||||||||
|
Diluted
weighted average shares
|
38,589 | 40,013 | 38,417 | 38,491 | ||||||||||||
|
Basic
pro forma net (loss) income per share
|
$ | (1.98 | ) | $ | 0.07 | $ | (1.91 | ) | $ | 0.09 | ||||||
|
Diluted
pro forma net (loss) income per share
|
$ | (1.98 | ) | $ | 0.06 | $ | (1.91 | ) | $ | 0.09 | ||||||