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

BioScrip, Inc.

(Exact Name of Registrant as Specified in its Charter)

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

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

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

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 Securities 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 2, 2007, BioScrip, Inc. issued a press release reporting its financial results for the three and six months ended June 30, 2007. 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 August 2, 2007.

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.

Exhibit 99.1

BioScrip, Inc. Reports Net Income for Second Quarter 2007; Operating Income Improves By $10.8 Million Over 2006

ELMSFORD, N.Y.—(BUSINESS WIRE)—August 2, 2007—BioScrip, Inc. (Nasdaq: BIOS) today reported second quarter 2007 net income of $0.5 million, or $0.01 per diluted share, on revenues of $295.0 million. Operating profit for the quarter was $2.5 million and EBITDAO (earnings before interest, taxes, depreciation, amortization and option expense) was $4.6 million. Compared to the second quarter 2006, net income improved $6.2 million or $0.16 per diluted share. In addition, revenues increased $15.4 million and operating income increased $10.8 million, both over the same period.

Chairman and CEO, Richard H. Friedman, stated, “BioScrip has made great strides this quarter and we positioned ourselves for continued Specialty growth, as exemplified by our recent contract announcement with UnitedHealthcare. We remain committed to executing on our vision of establishing BioScrip as an industry leader in providing superior specialty pharmaceutical healthcare services to patients, physicians, payors and pharmaceutical manufacturers.”

Second Quarter Reported Results

Total revenue for the second quarter 2007 was $295.0 million compared to $279.6 million for the same period a year ago.

Second quarter 2007 Specialty Services revenue was $238.1 million, an increase of $27.6 million, or 13.1% over the prior year, due primarily to revenues associated with preferred drug distribution arrangements with manufacturers, strong growth in infusion and new business resulting from Medicare’s Competitive Acquisition Program (“CAP”).

Second quarter 2007 PBM Services revenue was $56.9 million, a decrease of $12.2 million, or 17.7%, as compared to the second quarter of 2006. The decline in revenue is primarily due to the loss of previously reported PBM customers.

Gross profit for the second quarter 2007 was $33.3 million, or 11.3% of total revenue, compared to $28.8 million, or 10.3% of total revenue, for the same period of 2006. Gross profit improved primarily due to favorable sales mix.

Second quarter 2007 operating expenses decreased $6.3 million to $30.8 million, or 10.4% of total revenue from $37.1 million, or 13.3% of total revenue for the second quarter of 2006. The decrease is primarily due to our cost reduction efforts, along with lower bad debt expense as a result of improved credit and collection efforts as well as reduced amortization of intangibles.

Six-Month Period Reported Results

For the six-month period ended June 30, 2007, net loss was $0.9 million, or $0.02 per share compared to net loss of $6.9 million, or $0.18 per share in the same period a year

ago. Revenues increased 2.1% to $591.3 million for the six-month period ended June 30, 2007 from $579.3 million reported in the same period of last year.

Mr. Friedman added, “We have taken many critical steps to improve our current and future operational performance. The Company reported a $2.4 million sequential increase in quarterly operating income along with a 54.0% sequential improvement in quarterly EBITDAO.”

CAP Update

Although final election results have not yet been completed, preliminary information indicates an increase of approximately 35% in physician enrollment during the recent election period effective August 1, 2007. Second quarter 2007 CAP revenue was $9.2 million based on 2,450 physician enrollments. BioScrip continues to provide educational and marketing programs in order to support additional CAP utilization.

UnitedHealthcare Contract

As previously announced, UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, has awarded BioScrip an agreement to serve as one of two national specialty pharmacy providers of HIV/AIDS and Solid Organ Transplant drugs and services to UnitedHealthcare and its participating affiliates. This agreement became effective on August 1, 2007, with an initial term running through December 31, 2008.

Conference Call Information

BioScrip will host a conference call to discuss second quarter 2007 financial results on Thursday, August 2, at 10:00 a.m. EDST. Interested parties may participate in the conference call by dialing 800-926-4402 (US), or 212-231-2901 (International), 5-10 minutes prior to the start of the call. A replay of the conference call will be available from 12:30 p.m. EDST on August 2, through 11:59 p.m. EDST on August 8, by dialing 800-633-8284 (US), or 402-977-9140 (International), and entering reservation #21345640. 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 health care organization that partners with patients, physicians, health care 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

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 2 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 trend towards a return to profitability.

Schedule 1

BIOSCRIP, INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

		June 30, 2007				December 31, 2006
		(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	—			$	—
Receivables, less allowance for doubtful accounts of $13,056 and $13,774 at June 30, 2006 and December 31, 2006, respectively			130,638				135,139
Inventory			34,800				33,471
Prepaid expenses and other current assets			1,324				2,090
Total current assets			166,762				170,700
Property and equipment, net			9,761				10,409
Other assets and investments			464				681
Goodwill			114,824				114,991
Intangible assets, net			6,744				8,675
Total assets		$	298,555			$	305,456
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Line of credit		$	41,865			$	52,895
Accounts payable			56,032				51,724
Claims payable			7,301				9,548
Amounts due to Plan Sponsors			9,362				10,280
Accrued expenses and other current liabilities			8,948				9,230
Total current liabilities			123,508				133,677
Deferred taxes			11,380				9,946
Unrecognized tax benefits			4,187				—
Total liabilities			139,075				143,623
Stockholders’ equity
Common stock, $.0001 par value; 75,000,000 shares authorized, 40,921,186 shares issued and 37,531,367 outstanding at June 30, 2007; 40,680,233 shares issued and 37,488,257 outstanding at December 31, 2006;			4				4
Treasury stock, 2,263,500 and 2,247,150 shares at cost			(8,073	)			(8,002	)
Additional paid-in capital			240,318				239,315
Accumulated deficit			(72,769	)			(69,484	)
Total stockholders’ equity			159,480				161,833
Total liabilities and stockholders’ equity		$	298,555			$	305,456

Schedule 2

BIOSCRIP, INC
Reconciliation between GAAP and Non-GAAP Measures
(in thousands)
(unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2007				2006				2007				2006
Net Income (loss)		$	482			$	(5,710	)		$	(865	)		$	(6,866	)
Addback items:
Amortization of intangibles			484				1,639				1,931				3,261
Depreciation			1,007				1,042				2,051				2,073
Interest			856				731				1,940				1,182
Taxes			1,165				(3,321	)			1,563				(4,223	)
FAS 123R stock option expense			575				506				916				1,130
Earnings before interest, taxes, depreciation amortization and stock option expense (EBITDAO)		$	4,569			$	(5,113	)		$	7,536			$	(3,443	)

Schedule 3

BIOSCRIP, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2007				2006				2007				2006
Revenue		$	295,004			$	279,585			$	591,345			$	579,303
Cost of revenue			261,683				250,791				525,077				520,178
Gross profit			33,321				28,794				66,268				59,125
% of Revenue			11.3	%			10.3	%			11.2	%			10.2	%
Selling, general and administrative expenses			29,290				31,100				57,660				59,003
Bad debt expense			1,044				4,355				4,039				6,654
Amortization of intangibles			484				1,639				1,931				3,261
Merger related expenses			—				—				—				114
Total operating expenses			30,818				37,094				63,630				69,032
% of Revenue			10.4	%			13.3	%			10.8	%			11.9	%
Income (loss) from operations			2,503				(8,300	)			2,638				(9,907	)
Interest (expense), net			(856	)			(731	)			(1,940	)			(1,182	)
Income (loss) before income taxes			1,647				(9,031	)			698				(11,089	)
Provision for (benefit from) Income taxes			1,165				(3,321	)			1,563				(4,223	)
Net Profit (loss) income		$	482			$	(5,710	)		$	(865	)		$	(6,866	)
Basic net income (loss) per share		$	0.01			$	(0.15	)		$	(0.02	)		$	(0.18	)
Diluted net income (loss) per share		$	0.01			$	(0.15	)		$	(0.02	)		$	(0.18	)
Basic weighted-average shares			37,499				37,222				37,495				37,212
Diluted weighted-average shares			37,824				37,222				37,495				37,212

CONTACT: BioScrip, Inc.
      Craig Allison, 914-460-1636
      Investor Relations
      callison@bioscrip.com