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) August 4, 2005

BioScrip, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware (State or Other Jurisdiction of Incorporation)		0-28740 (Commission File Number)		05-0489664 (IRS Employer Identification No.)

100 Clearbrook Road, Elmsford, New York (Address of Principal Executive Offices)		10523 (Zip Code)

Registrant’s telephone number, including area code (914) 460-1600

(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:

o		Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).

o		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 August 4, 2005, BioScrip, Inc. issued a press release reporting its earnings for the quarter ended June 30, 2005. 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. We believe that the non-GAAP financial measures presented provide important insight into our ongoing operations and a meaningful comparison of revenue, gross profit, selling, general and administrative expenses, operating income, net income and earnings per share. As required by Regulation G, we have also provided a reconciliation between any non-GAAP financial measures presented and the most directly comparable GAAP financial measures.

     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 August 4, 2005.

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.

News Release

BIOSCRIP ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
Reports $6.6 million of special charges related to merger and re-branding efforts

Elmsford, NY and Minneapolis, MN – August 4, 2005 – BioScrip, Inc. (NASDAQ: BIOS) today reported second quarter 2005 revenue of $286.6 million and a loss per share of $0.10 including special charges totaling $6.6 million ($4.2 million net of taxes), or $0.12 per share. Excluding these charges, earnings per share for the quarter would have been $0.02.

“Our strategy of expanding therapies through our community pharmacies has commenced,” stated Henry F. Blissenbach, BioScrip’s President and Chief Executive Officer. “We are on track to meet our integration and cost savings targets, with at least $10 million in annual cost savings as we start 2006. However, in the second quarter, we had increased costs as a result of duplicate expenses that were, in fact, planned. We are on track with our first quarter 2006 financial expectations.”

Mr. Blissenbach continued, “We have also decided to drive our marketing strategy to a single brand, BioScrip, resulting in a $5.8 million non-cash charge to write-off tradename intangible assets associated with previous brands. We are confident that a unified marketing theme utilizing the BioScrip name will provide value and clarity in all the markets we serve. In addition to the tradename charge, we incurred $0.8 million in merger and related costs in the quarter.”

Second Quarter GAAP Reported Results

Revenue for the second quarter of 2005 increased 86% to $286.6 million, compared to $154.1 million reported in the second quarter of 2004. Revenue was up due to the acquisition of Chronimed Inc. on March 12, 2005, the results of which are not included in last year’s second quarter 2004 results. Net loss was $3.5 million or $0.10 per share for the second quarter of 2005, compared with net income of $1.9 million, or $0.09 per share, for the second quarter of 2004. Net income decreased due primarily to special charges, gross margin pressures in the Specialty Services segment, increased amortization expense from the merger, and duplicative operating expenses to be eliminated as part of the cost savings efforts. Special charges for the second quarter of 2005 include $5.8 million for the write-off of tradename intangible assets and $0.8 million for merger and related expenses totaling $6.6 million ($4.2 million net of taxes), or $0.12 per share. Second quarter GAAP reported results are provided in Schedules 1, 2 and 3 attached to this press release.

Second Quarter Adjusted Results (1)

Second quarter non-GAAP adjusted financial results and reconciliations to GAAP financial results are provided in Schedules 4 through 9 attached to this press release. These financial results reflect operations as if the merger were completed at the beginning of each period presented and exclude special charges.

August 4, 2005
Page 2

Revenue for second quarter 2005 decreased 8% to $286.6 million, compared to $311.8 million in the second quarter of 2004. Second quarter 2005 Specialty Services revenue declined $25.0 million or 11% to $193.1 million compared to $218.1 million for the same period last year, due primarily to the loss of the Aetna specialty pharmacy distribution contract that ended February 28, 2005. Revenue from Aetna was approximately $31 million in last year’s second quarter. PBM Services revenue, which includes traditional mail service, decreased slightly for the second quarter 2005 to $93.5 million compared to $93.7 million for the same period last year. PBM Services was impacted negatively by the loss of previously disclosed contracts, offset by continued growth from core customers.

Gross profit for second quarter 2005 was $30.5 million, or 10.6% of revenue compared to $33.6 million, or 10.8% of revenue during the same period last year, due primarily to gross margin pressures in Specialty Services, particularly specialty mail and infusion. Selling, general and administrative expenses were $27.6 million for second quarter 2005 compared to $26.2 million for the same period a year ago. The majority of cost savings expected from the merger are not yet reflected in the second quarter 2005 spending rate. Amortization expense was $2.0 million for the second quarter 2005 compared to $0.8 million last year, reflecting the increased amortization coming from the intangible assets acquired from Chronimed Inc. in the merger. Adjusted operating income for the second quarter 2005 decreased 85% to $1.0 million, before special charges, compared to $6.7 million for the same period a year ago.

Net income for the second quarter 2005, before special charges, was $0.6 million, or $0.02 per share compared to $4.0 million or $0.11 per share for second quarter 2004.

Mr. Blissenbach commented further, “I am especially pleased with our restructuring progress. Our sales and marketing team has targeted key physicians, clinics and hospitals in driving our community pharmacy initiative. We rolled out our expanded product line of HIV, oncology, transplant and other key injectables to four community pharmacies in July, and expect to implement eight more by year end. This initiative, along with better performance in our mail and PBM businesses, will drive revenue growth in 2006.”

“Our spending actions will begin to show benefits in the second half, particularly in the fourth quarter, as we move through our integration plan. Our mail service consolidation in second quarter and our Finance, IT and corporate function integrations through fourth quarter will improve our spending performance as we enter 2006,” concluded Blissenbach.

Financial Outlook

Calendar Year 2005

The Company anticipates revenue for 2005 to be $1.17 to $1.18 billion, with revenue of $580 to $590 million in the second half of 2005; earnings before interest, taxes, depreciation and amortization (EBITDA) for 2005 of $18 to $19 million before special charges, with $8 to $9 million of EBITDA in the second half of 2005; and total year adjusted EPS of $0.15 to $0.17 before special charges, with $0.05 to $0.07 EPS in the second half of 2005. Also, the Company expects that special charges related to the merger and branding will continue through first quarter March 2006.

August 4, 2005
Page 3

The above financial outlook assumes that the MIM and Chronimed merger was completed January 1, 2005, excludes special charges, and is consistent with the financial presentation in Schedules 4 and 7 attached to this press release.

First Quarter 2006

The Company expects first quarter March 2006 revenue of approximately $303 to $308 million, EBITDA of $8.5 to $9.5 million, and EPS of $0.08 to $0.10, based on first quarter 2006 shares outstanding of 37.5 to 38.0 million and an effective tax rate of 39%.

Conference Call Information

BioScrip will hold a conference call to discuss second quarter 2005 financial results on Thursday, August 4, 2005 at 10:00 a.m. EDT. To access the live conference call, dial 212-231-6027 at least five to ten minutes prior to the scheduled time and follow the operator’s instructions. The conference call will also be webcast live over the Internet. To access the live webcast, visit the BioScrip website at www.bioscrip.com and follow the logon prompts.

If you are unable to listen to the live call, a webcast replay will be archived on the BioScrip website. In addition, a recording of the conference call will be available for a 24-hour period beginning at 12:00 p.m. EDT August 4 through 12:00 p.m. EDT August 11, 2005. To access the replay of the call, dial 800-633-8284 or 402-977-9140, and enter reservation number 21252717.

About BioScrip, Inc.

BioScrip provides comprehensive pharmaceutical care solutions. We partner with healthcare payors, pharmaceutical manufacturers, government agencies, physicians, and patients to deliver cost effective programs that enhance the quality of patient life. We focus our products and services in two core areas: Specialty medication distribution and clinical management services, both nationally and community-based; and Pharmacy Benefit Management services. Our specialty medication distribution capabilities include condition-specific clinical management programs tailored to improve the care of individuals with complex health conditions such as HIV/AIDS, Cancer, Infusion IVIG, Hepatitis C, Rheumatoid Arthritis, Multiple Sclerosis, and Transplantation. Our complete pharmacy benefit management programs include customized benefit plan design, pharmacy network management and sophisticated reporting capabilities that deliver improved clinical and economic outcomes. In addition, we have 30 community pharmacy locations in 25 major metropolitan markets across the U.S., providing nationwide access and clinical management capabilities in a high-touch community-based environment.

Forward Looking Statements

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

August 4, 2005
Page 4

future operating performance of the Company and our success with respect to the integration and consolidation. 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.

Notes to Press Release Tables

On March 12, 2005 we completed our merger with Chronimed Inc. The accompanying balance sheet (Schedule 2) as of June 30, 2005, reflects the impact of this transaction and the preliminary allocation of the purchase price to the net assets from Chronimed Inc. This purchase price allocation is based on an independent valuation and management’s assessment of that valuation. We anticipate that some adjustments may need to be made to this purchase price allocation as certain assets acquired in the merger are settled through March 2006.

BioScrip financial results include Chronimed Inc. financial results for the nineteen days ended March 31, 2005 and the three months ended June 30, 2005. Actual GAAP reported financial results are provided in Schedules 1, 2 and 3 attached to this press release. To assist you in understanding the impact of the merger with Chronimed, we have prepared the attached schedules 4 and 7 to reflect the combined adjusted results of operations of BioScrip, Inc. (formerly MIM Corporation) and Chronimed as if the merger with Chronimed had been completed at the beginning of each period presented, without special charges. This press release also includes certain non-GAAP financial measures as defined under Regulation G. As required by Regulation G, we have provided in Schedules 5, 6, 8 and 9 to this press release a reconciliation of those measures to the most comparable GAAP financial measures.

(1)

See Table of Reconciliations on Schedules 5, 6, 8 and 9 for the differences between the non-GAAP financial measures and the most directly comparable GAAP financial measures. As required by Regulation G, the Company has provided a quantitative comparison between GAAP and disclosed non-GAAP financial measures. The non-GAAP measures presented provide important insight into the ongoing operations and a meaningful comparison of revenue, gross profit, selling, general and administrative expense, operating income, earnings before interest, taxes, depreciation and amortization (EBITDA), net income and earnings per share.

Contact

Brad Schumacher
Investor Relations
BioScrip, Inc.
952-979-3942
bschumacher@bioscrip.com

(more)

August 4, 2005
Page 5

Schedule 1

BIOSCRIP, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
		2005 (a)				2004 (b)				2005 (c)				2004 (b)
Revenue		$	286,617			$	154,125			$	475,015			$	302,178
Cost of revenue			256,104				137,275				424,055				268,364
Gross profit			30,513				16,850				50,960				33,814
% of Revenue			10.6	%			10.9	%			10.7	%			11.2	%
Operating expenses
Selling, general and administrative expenses			27,587				12,607				43,872				25,102
Amortization of intangibles			1,956				768				2,847				1,408
Special charges			6,633				—				7,020				—
Total operating expenses			36,176				13,375				53,739				26,510
% of Revenue			12.6	%			8.7	%			11.3	%			8.8	%
(Loss) income from operations			(5,663	)			3,475				(2,779	)			7,304
% of Revenue			-2.0	%			2.3	%			-0.6	%			2.4	%
Interest income (expense), net			12				(231	)			(141	)			(427	)
(Loss) income before income taxes			(5,651	)			3,244				(2,920	)			6,877
Income tax benefit (expense)			2,111				(1,298	)			1,047				(2,751	)
Net (loss) income		$	(3,540	)		$	1,946			$	(1,873	)		$	4,126
% of Revenue			-1.2	%			1.3	%			-0.4	%			1.4	%
Basic net (loss) income per share		$	(0.10	)		$	0.09			$	(0.06	)		$	0.19
Diluted net (loss) income per share		$	(0.10	)		$	0.09			$	(0.06	)		$	0.18
Basic weighted-average shares			36,829				22,214				31,238				22,187
Diluted weighted-average shares			36,829				22,780				31,238				22,724
Supplemental presentation of non-GAAP financial measures:
(Loss) Income from Operations		$	(5,663	)		$	3,475			$	(2,779	)		$	7,304
Addbacks:
Amortization			1,956				768				2,847				1,408
Depreciation			897				490				1,538				1,045
EBITDA (Earnings before interest, taxes, depreciation and amort.)		$	(2,810	)		$	4,733			$	1,606			$	9,757

August 4, 2005
Page 6

Schedule 2

BIOSCRIP, INC.
Consolidated Balance Sheets
(in thousands)

		June 30,
		2005				December 31,
		(unaudited)				2004
ASSETS
Current assets
Cash and cash equivalents		$	5,443			$	2,957
Accounts receivable (net of allowances of $3,989 and $3,240, respectively)			109,137				65,439
Inventory			23,484				11,897
Prepaid expenses			2,618				2,112
Short term deferred taxes			5,713				2,798
Total current assets			146,395				85,203
Property and equipment, net			8,018				4,300
Long term deferred taxes, net			—				2,383
Goodwill			116,245				74,874
Intangible assets, net			18,540				17,583
Deferred acquisition costs			—				1,702
Other assets, net			710				427
Total assets		$	289,908			$	186,472
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Line of credit		$	—			$	7,303
Accounts payable			30,263				20,012
Claims payable			26,917				28,659
Payables to plan sponsors			2,167				2,217
Accrued expenses			11,528				12,598
Total current liabilities			70,875				70,789
Deferred taxes			2,529				—
Shareholders’ equity
Common stock, issued and outstanding shares — 36,901 and 22,307 shares outstanding at June 30, 2005 and December 31, 2004, respectively			4				2
Treasury stock, 2,198 shares at cost at June 30, 2005 and December 31, 2004, respectively			(8,002	)			(8,002	)
Additional paid-in capital			233,723				131,031
Accumulated deficit			(9,221	)			(7,348	)
Total shareholders’ equity			216,504				115,683
Total liabilities and shareholders’ equity		$	289,908			$	186,472

August 4, 2005
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Schedule 3

BIOSCRIP, INC.
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

		Six Months Ended
		June 30,				June 30,
		2005				2004
Operating activities
Net (loss) income		$	(1,873	)		$	4,126
Adjustments to reconcile income to net cash provided by (used in) operating activities:
Depreciation			1,538				1,045
Amortization			2,847				1,408
Tradename write-off			5,756				—
Issuance of stock to employees			57				44
Provision for losses on receivables			2,018				776
Changes in operating assets and liabilities:
Accounts receivable			(3,057	)			(3,683	)
Inventory			(1,926	)			1,681
Prepaid expenses and other current assets			772				768
Accounts payable			5,176				(3,278	)
Claims payable			(1,742	)			2,799
Payables to plan sponsors and others			(49	)			(8,592	)
Accrued expenses			(17,838	)			103
Net cash used in operating activities			(8,321	)			(2,803	)
Investing activities
Purchases of property and equipment			(1,486	)			(355	)
Costs of acquisitions, net of cash acquired			16,992				(14,256	)
Decrease (increase) in other assets			1,563				(24	)
Net cash provided by (used in) investing activities			17,069				(14,635	)
Financing activities
(Repayments) borrowings on line of credit			(7,303	)			10,585
Principal payments on capital lease obligations			(34	)			(197	)
Principal payments on short term debt			—				(467	)
Proceeds from exercise of stock options			1,075				588
Net cash provided by (used in) financing activities			(6,262	)			10,509
Increase (decrease) in cash and cash equivalents			2,486				(6,929	)
Cash and cash equivalents at beginning of year			2,957				9,428
Cash and cash equivalents at end of period		$	5,443			$	2,499

August 4, 2005
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Schedule 4

BIOSCRIP, INC.
Consolidated Adjusted Statements of Income (a)
(in thousands, except per share data)
(unaudited)

		Three Months Ended
		June 30, 2005				June 30, 2004
		Combined				Combined
		Adjusted				Adjusted
		BioScrip (b)				BioScrip
Revenue		$	286,617			$	311,784
Cost of revenue			256,104				278,143
Gross profit			30,513				33,641
% of Revenue			10.6	%			10.8	%
Operating expenses
Selling, general and administrative expenses			27,587				26,184
Amortization of intangibles			1,956				768
Special charges			—				—
Total operating expenses			29,543				26,952
% of Revenue			10.3	%			8.6	%
Income from operations			970				6,689
% of Revenue			0.3	%			2.1	%
Interest income (expense), net			12				(169	)
Other income			—				—
Income before income taxes			982				6,520
Income tax expense			(363	)			(2,543	)
Net income		$	619			$	3,977
% of Revenue			0.2	%			1.3	%
Diluted net income per share		$	0.02			$	0.11
Diluted weighted-average shares			37,260				37,284
Supplemental presentation of financial measures:
Income from operations		$	970			$	6,689
EBITDA addbacks:
Amortization			1,956				768
Depreciation			897				1,068
EBITDA (Earnings before interest, taxes, depreciation and amort.)		$	3,823			$	8,525

August 4, 2005
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Schedule 5

BIOSCRIP, INC.
Statement of Operations Reconciliation between GAAP and Non-GAAP Measures
For the Three Months Ended June 30, 2005
(in thousands, except per share data)
(unaudited)

		As				Special				BioScrip
		Reported				Charges				As Adjusted
Revenue		$	286,617							$	286,617
Cost of revenue			256,104								256,104
Gross profit			30,513								30,513
% of Revenue			10.6	%							10.6	%
Operating expenses
Selling, general and admin. expenses			27,587								27,587
Amortization of intangibles			1,956								1,956
Special charges			6,633				(6,633	)			—
Total operating expenses			36,176				(6,633	)			29,543
% of Revenue			12.6	%							10.3	%
(Loss) income from operations			(5,663	)			6,633				970
% of Revenue			-2.0	%							0.3	%
Interest income (expense), net			12				—				12
Other income			—				—				—
(Loss) income before income taxes			(5,651	)			6,633				982
Income tax benefit (expense)			2,111				(2,474	)			(363	)
Net (loss) income		$	(3,540	)		$	4,159			$	619
Diluted net (loss) income per share		$	(0.10	)						$	0.02
Diluted weighted-average shares			36,829								37,260
Supplemental presentation of financial measures:
(Loss) Income from operations		$	(5,663	)		$	6,633			$	970
EBITDA addbacks:
Amortization			1,956				—				1,956
Depreciation			897				—				897
EBITDA		$	(2,810	)		$	6,633			$	3,823

August 4, 2005
Page 10

Schedule 6

BIOSCRIP, INC.
Statement of Operations Reconciliation between GAAP and Non-GAAP Measures
For the Three Months Ended June 30, 2004
(unaudited)

		MIM Corp.				Chronimed				Special				BioScrip
		As Reported				As Reported				Charges				As Adjusted
Revenue		$	154,125			$	157,659			$	—			$	311,784
Cost of revenue			137,275				140,868				—				278,143
Gross profit			16,850				16,791				—				33,641
% of Revenue			10.9	%			10.7	%							10.8	%
Operating expenses
Selling, general and admin. expenses			12,607				13,577				—				26,184
Amortization of intangibles			768				—				—				768
Special charges			—				—				—				—
Total operating expenses			13,375				13,577				—				26,952
% of Revenue			8.7	%			8.6	%							8.6	%
Income from operations			3,475				3,214				—				6,689
% of Revenue			2.3	%			2.0	%							2.1	%
Interest income (expense), net			(231	)			62				—				(169	)
Other income			—				—				—				—
Income before income taxes			3,244				3,276				—				6,520
Income tax expense			(1,298	)			(1,245	)			—				(2,543	)
Net income		$	1,946			$	2,031			$	—			$	3,977
Diluted net income per share		$	0.09											$	0.11
Diluted weighted-average shares			22,780												37,284
Supplemental presentation of financial measures:
Income from operations		$	3,475			$	3,214			$	—			$	6,689
EBITDA addbacks:
Amortization			768				—				—				768
Depreciation			490				578				—				1,068
EBITDA		$	4,733			$	3,792			$	—			$	8,525

August 4, 2005
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Schedule 7

BIOSCRIP, INC.
Consolidated Adjusted Statements of Income (a)
(in thousands, except per share data)
(unaudited)

		Six Months Ended
		June 30, 2005				June 30, 2004
		Combined				Combined
		Adjusted				Adjusted
		BioScrip (b)				BioScrip
Revenue		$	589,094			$	602,179
Cost of revenue			525,210				536,208
Gross profit			63,884				65,971
% of Revenue			10.8	%			11.0	%
Operating expenses
Selling, general and administrative expenses			55,210				51,745
Amortization of intangibles			2,847				1,408
Special charges			—				—
Total operating expenses			58,057				53,153
% of Revenue			9.9	%			8.8	%
Income from operations			5,827				12,818
% of Revenue			1.0	%			2.1	%
Interest income (expense), net			(57	)			(295	)
Other income			—				75
Income before income taxes			5,770				12,598
Income tax expense			(2,307	)			(4,925	)
Net income		$	3,463			$	7,673
% of Revenue			0.6	%			1.3	%
Diluted net income per share		$	0.09			$	0.21
Diluted weighted-average shares			37,022				37,284
Supplemental presentation of financial measures:
Income from operations		$	5,827			$	12,818
EBITDA addbacks:
Amortization			2,847				1,408
Depreciation			2,020				2,175
EBITDA (Earnings before interest, taxes, depreciation and amort.)		$	10,694			$	16,401

August 4, 2005
Page 12

Schedule 8

BIOSCRIP, INC.
Statement of Operations Reconciliation between GAAP and Non-GAAP Measures
For the Six Months Ended June 30, 2005
(in thousands, except per share data)
(unaudited)

		As				Chronimed				Special				BioScrip
		Reported				Pre-Merger				Charges				As Adjusted
Revenue		$	475,015			$	114,079							$	589,094
Cost of revenue			424,055				101,155								525,210
Gross profit			50,960				12,924								63,884
% of Revenue			10.7	%			11.3	%							10.8	%
Operating expenses
Selling, general and admin. expenses			43,872				11,338								55,210
Amortization of intangibles			2,847				—								2,847
Special charges			7,020				2,037				(9,057	)			—
Total operating expenses			53,739				13,375				(9,057	)			58,057
% of Revenue			11.3	%			11.7	%							9.9	%
(Loss) income from operations			(2,779	)			(451	)			9,057				5,827
% of Revenue			-0.6	%			-0.4	%							1.0	%
Interest income (expense), net			(141	)			84				—				(57	)
Other income			—				—				—				—
(Loss) income before income taxes			(2,920	)			(367	)			9,057				5,770
Income tax benefit (expense)			1,047				143				(3,497	)			(2,307	)
Net (loss) income		$	(1,873	)		$	(224	)		$	5,560			$	3,463
Diluted net (loss) income per share		$	(0.06	)										$	0.09
Diluted weighted-average shares			31,238												37,022
Supplemental presentation of financial measures:
(Loss) Income from operations		$	(2,779	)		$	(451	)		$	9,057			$	5,827
EBITDA addbacks:
Amortization			2,847				—				—				2,847
Depreciation			1,538				482				—				2,020
EBITDA		$	1,606			$	31			$	9,057			$	10,694

August 4, 2005
Page 13

Schedule 9

BIOSCRIP, INC.
Statement of Operations Reconciliation between GAAP and Non-GAAP Measures
For the Six Months Ended June 30, 2004
(unaudited)

		MIM Corp.				Chronimed				Special				BioScrip
		As Reported				As Reported				Charges				As Adjusted
Revenue		$	302,178			$	300,001			$	—			$	602,179
Cost of revenue			268,364				267,844				—				536,208
Gross profit			33,814				32,157				—				65,971
% of Revenue			11.2	%			10.7	%							11.0	%
Operating expenses
Selling, general and admin. expenses			25,102				26,643				—				51,745
Amortization of intangibles			1,408				—				—				1,408
Special charges			—				—				—				—
Total operating expenses			26,510				26,643				—				53,153
% of Revenue			8.8	%			8.9	%							8.8	%
Income from operations			7,304				5,514				—				12,818
% of Revenue			2.4	%			1.8	%							2.1	%
Interest income (expense), net			(427	)			132				—				(295	)
Other income			—				75				—				75
Income before income taxes			6,877				5,721				—				12,598
Income tax expense			(2,751	)			(2,174	)			—				(4,925	)
Net income		$	4,126			$	3,547			$	—			$	7,673
Diluted net income per share		$	0.18											$	0.21
Diluted weighted-average shares			22,724												37,284
Supplemental presentation of financial measures:
Income from operations		$	7,304			$	5,514			$	—			$	12,818
EBITDA addbacks:
Amortization			1,408				—				—				1,408
Depreciation			1,045				1,130				—				2,175
EBITDA		$	9,757			$	6,644			$	—			$	16,401