ELMSFORD, N.Y., Aug. 6, 2014 /PRNewswire/ -- BioScrip, Inc. (NASDAQ: BIOS) today announced its financial results for the second quarter of 2014. Second quarter revenue from continuing operations was $247.1 million, and the net loss from continuing operations, net of income taxes, was $18.6 million, or $0.27 per basic and diluted share. Non-GAAP adjusted loss from continuing operations per basic and diluted share was $0.07.
Second Quarter Highlights
- Total revenue increased by $74.8 million, or 43.4%, as compared to the prior year period. Revenue from the Infusion Services segment increased by $74.6 million, or 47.8%, as compared to the prior year period. Organic revenue growth for the Infusion Services segment remained in the double digits year-over-year.
- Gross profit from continuing operations was $65.4 million, or 26.4% of revenue, as compared to $57.8 million, or 33.5% of revenue, in the prior year period. The decline in gross profit margin percentage was driven primarily by the decline in the higher margin PBM Services segment.
- Adjusted EBITDA from continuing operations was $11.0 million, an increase of $0.2 million over the prior year period. Adjusted EBITDA from the Infusion Services segment increased by $2.2 million, or 15.7%, as compared to the prior year, offset by a $3.1 million, or 62.6%, decrease in the PBM Services segment. Adjusted EBITDA also included $4.6 million of income related to the decrease of the fair value of contingent consideration relating to the Company's Infusion acquisitions, offset by a $5.5 million increase in the bad debt and contractual reserve provisions relating to the integration of our acquisitions. Additionally, Adjusted EBITDA included $0.5 million of increased investment in reimbursement resources in the form of overtime, temporary labor and third-party professional fees.
- As a result of the continued focus on cash collections, BioScrip has increased monthly average accounts receivable collections from $69.3 million in the first quarter of 2014 to $80.9 million in the second quarter of 2014.
"During the second quarter, we made continued progress in executing our strategic priorities to deliver strong organic growth, improve cash flows and strengthen our balance sheet. Our team members worked tirelessly to deliver strong cash collections throughout the quarter, and we expect to continue this momentum into the third quarter," said Rick Smith, President and Chief Executive Officer of BioScrip.
"We are a leading infusion provider and believe our recent accomplishments position us well for continued improvement in operating performance as we head into the second half of the year. We intend to continue to deliver exceptional clinical care to patients, and strengthen our relationships with physicians, hospital systems and managed care companies to deliver enhanced value for our shareholders," concluded Smith.
Results of Operations
Second Quarter 2014 versus Second Quarter 2013
Total revenue for the second quarter of 2014 was $247.1 million, compared to $172.3 million for the same period a year ago, an increase of $74.8 million, or 43.4%. Infusion Services segment revenue was $230.5 million in the second quarter as compared to $156.0 million for the same period in 2013. The 47.8% increase was driven primarily by continued strong double-digit organic growth and the acquisition of CarePoint Partners. PBM Services segment revenue was stable year-over-year at $16.6 million, versus $16.3 million in the second quarter of last year.
Consolidated gross profit for the second quarter of 2014 was $65.4 million, or 26.4% of revenue, compared to $57.8 million, or 33.5% of revenue, for the second quarter of 2013. The increase in gross profit was the result of organic growth and the acquisition of CarePoint Partners, offset by a decline in the PBM Services segment. The decline in gross profit margin percentage was driven primarily by the decline in the higher-margin PBM Services segment.
During the second quarter of 2014, Infusion Services segment Adjusted EBITDA was $16.2 million, compared to $14.0 million in the prior year quarter. The 15.7% improvement in Adjusted EBITDA in the Infusion Services segment resulted primarily from organic revenue growth and the acquisition of CarePoint Partners. Infusion Services segment Adjusted EBITDA also included $4.6 million of income related to the decrease of the fair value of contingent consideration relating to our infusion acquisitions, offset by a $5.5 million increase in the bad debt and contractual reserve provisions relating to the integration of our acquisitions.
PBM Services segment revenue was $16.6 million for the second quarter of 2014, compared to $16.3 million for the prior year period. The increase was related to the growth in traditional PBM volume, offset by declines in prescription discount card volume. PBM Services segment Adjusted EBITDA was $1.8 million, or 11.1% of segment revenue, for the second quarter of 2014 compared to $4.9 million, or 30.1% of segment revenue, in the prior year quarter.
On a consolidated basis, BioScrip reported $11.0 million of Adjusted EBITDA during the second quarter of 2014, or 4.5% of total revenue, compared to $10.8 million, or 6.3% of total revenue, in the same period last year. Adjusted EBITDA included $0.5 million of increased investment in reimbursement resources in the form of overtime, temporary labor and third-party professional fees.
Interest expense in the second quarter of 2014 was $9.1 million compared to $6.5 million in the prior year period.
Income tax expense for continuing operations in the second quarter of 2014 was $3.1 million compared to an income tax expense of $0.1 million in the prior year period.
The loss from continuing operations, net of taxes, for the second quarter of 2014 was $18.6 million, or a loss of $0.27 per basic and diluted share, compared to a net loss of $9.3 million, or $0.14 per basic and diluted share, in the prior year period.
Liquidity and Capital Resources
For the six months ended June 30, 2014, BioScrip used $26.7 million in net cash from continuing operating activities, compared to cash used of $22.8 million during the six months ended June 30, 2013. Sequentially, net cash from continuing operating activities improved by $22.0 million from the first quarter of 2014. As of June 30, 2014, the Company's cash balance was $1.5 million, and it had $418.7 million of outstanding debt and an undrawn $75 million revolving credit facility. Capital expenditures for the second quarter of 2014 were $3.9 million.
The Company projects that its 2014 revenue will be at the high end of its guidance range of $940.0 million to $980.0 million and that its 2014 Adjusted EBITDA will be in a range of $55.0 million to $60.0 million. This reflects the Company's current assessment of the business and assumes:
- Infusion Services segment is expected to continue to deliver double-digit organic revenue growth;
- Infusion Services segment Adjusted EBITDA margin percentage is expected to sequentially improve;
- Momentum to collect older receivables impacted by the integration of the acquisitions continues in the second half of the year. These efforts are on-going, but timing may be uncertain; and
- Continued stability is expected in our PBM Services segment from an adjusted EBITDA perspective, consistent with its performance in the first half of the year.
BioScrip will host a conference call to discuss its second quarter 2014 financial results on August 7, 2014 at 8:30 a.m. Eastern Time. Interested parties may participate in the conference call by dialing 800-679-2940 (US), or 303-223-2690 (International), 5-10 minutes prior to the start of the call. A replay of the conference call will be available for two weeks after the call's completion by dialing 800-633-8284 (US) or 402-977-9140 (International) and entering conference call ID number 21728610. An audio webcast and archive will also be available for 30 days under the "Investor Relations" section of the BioScrip website at www.bioscrip.com.
About BioScrip, Inc.
BioScrip, Inc. is a leading national provider of infusion and home care management solutions. BioScrip partners with physicians, hospital systems, facilities-based providers, healthcare payors, and pharmaceutical manufacturers 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. BioScrip provides its infusion and home care services from over 80 locations across 29 states.
Forward-Looking Statements Safe Harbor This press release includes statements that may constitute "forward-looking statements," including projections of certain measures of the Company's results of operations, projections of certain charges and expenses, and other statements regarding the Company's goals, regulatory approvals and strategy. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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," "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 or contribute to such differences include but are not limited to risks associated with: the Company's ability to integrate the CarePoint business and other acquisitions; the Company's ability to grow its Infusion Services segment organically or through acquisitions and obtain financing in connection therewith; its ability to reduce operating costs while sustaining growth; 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, including the Company's annual report on Form 10-K for the year ended December 31, 2013. 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.
Reconciliation to Non-GAAP Financial Measures
In addition to reporting all financial information required in accordance with generally accepted accounting principles (GAAP), the Company is also reporting EBITDA, Adjusted EBITDA, and Adjusted EPS, which are non-GAAP financial measures.
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