BioScrip, Inc. Reports 2008 Third Quarter Earnings.--Revenue of $359.4 Million; EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.04 Including $0.02 One-Time Charge; Specialty Services up 25.6%-- ELMSFORD, N.Y. -- BioScrip, Inc. (Nasdaq: BIOS BIOS in full Basic Input/Output System Computer program that is typically stored in EPROM and used by the CPU to perform start-up procedures when the computer is turned on. ) today reported net income for the quarter ended September 30, 2008 of $1.4 million, or $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, on revenue of $359.4 million, compared to $1.7 million, or $0.04 per diluted share, on revenue of $297.6 million in the third quarter of 2007. BioScrip's 2008 results include a one-time charge of $795,000, or $0.02 per share as a result of a civil settlement with the U.S. Office of The Inspector General Office of the Inspector General (or OIG) is a common sub-agency within cabinet-level agencies of the United States federal government and serves as auditing and investigative arm of the agency's programs focused on identifying waste, fraud and abuse. ("OIG Noun 1. OIG - the investigative arm of the Federal Trade Commission Office of Inspector General independent agency - an agency of the United States government that is created by an act of Congress and is independent of the executive departments ") related to conduct beginning in 2003 and ending when the Company self-reported in late 2006. Third Quarter Highlights * Consolidated revenue of $359.4 million, a 20.8% increase over the same period last year; excluding United Healthcare Group ("UHG UHG United Health Group UHG Ultrahigh Gain (antenna) UHG Unteroffiziersheimgesellschaft (German) ") and Medicare's Competitive Acquisition Program ("CAP"), revenue grew 11.4%. * Specialty Services revenue of $307.1 million, an increase of 25.6% over the prior year; excluding UHG and CAP, Specialty Services revenue increased 14.4% over the same period last year. * Gross profit of $36.1 million, or 10.0% of total revenue, compared to $35.4 million, or 11.9% of total revenue, for the same period of 2007. Excluding UHG and CAP, gross margin as a percentage of revenue was 10.9%. * Operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. as a percentage of revenue decreased to 9.3% from 10.8% over the same period a year ago.(*) * Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $2.8 million, a decrease of 10.9% over the prior year.(*) * EBITDAO (earnings before interest, taxes, depreciation, amortization and option expense) of $5.3 million.(*) (*)Includes a $795,000 one-time charge. Richard H. Friedman, BioScrip's Chairman and Chief Executive Officer, stated, "Our third quarter results demonstrate the success of our Specialty Services sales strategy - excluding the CAP and UHG contracts, Specialty Services sales growth increased 14.4% year-over-year. Looking forward, without CAP and UHG we expect to see further sales growth and reduced operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , resulting in improved operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . We have identified those operating expenses directly related to both CAP and United that will be eliminated. We continue to examine our cost structure to find additional ways to improve operating performance and have begun testing our upgraded integrated pharmacy system. This system is expected be fully functional in the second half of 2009. We believe the full implementation will permit us to reduce further operating expenses while growing our core business; the Company anticipates that all the above will result in improved operating profits in 2009," concluded Friedman. The Company previously reported that it was notified by Aetna that its network participation agreements, representing approximately $27 million of revenues, would be terminated in the fourth quarter of 2008. The Company has since renegotiated new contracts with Aetna to participate in its retail and specialty networks specialty network Single specialty network Managed care A loosely cohesive group of physicians specialized in one area of medicine–eg, cardiology, oncology, Ob/Gyn, ophthalmology, radiology, etc, who form a network to attempt to capture a segment of a Pt on a limited basis. The Company anticipates retaining approximately two-thirds of its revenues and associated profitability. During the third quarter, the Company incurred a one-time charge of $795,000 or $0.02 per share, as a result of entering into a civil settlement with the OIG. The circumstances surrounding the settlement were self-reported by the Company through its corporate compliance program, and related to conduct between 2003 and 2006. Results of Operations Total revenue for the third quarter 2008 was $359.4 million compared to $297.6 million for the same period a year ago. Third quarter 2008 Specialty Services revenue were $307.1 million, an increase of $62.6 million, or 25.6% over the prior year, due to revenue associated with preferred distribution arrangements with manufacturers, UHG, CAP, and other organic growth. PBM PBM - play by mail. See play by electronic mail. Services revenue remains essentially unchanged at $52.3 million for the second quarter. Gross profit for the third quarter 2008 was $36.1 million, or 10.0% of total revenue, compared to $35.4 million, or 11.9% of total revenue, for the same period of 2007. The gross margin decreased primarily due to the higher revenue but lower margin UHG and CAP business. Third quarter 2007 gross profit included a one-time favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. adjustment with the Company's primary drug distributor. On a sequential basis, the Company reported 0.3% lower gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. primarily due to reduced reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates in the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State Medicaid program and a temporary decline in Medi-Cal reimbursement (which was reversed by mid-August). Third quarter 2008 operating expenses as a percentage of revenue declined to 9.3% from 10.8% over the prior year. Included in the third quarter 2008 operating expenses is the one-time civil settlement with the OIG. The reduction in operating expenses as a percentage of total revenue is due to the Company's ability to leverage its overhead structure. Nine-Month Period Reported Results For the nine-months ended September 30, 2008, net income was $2.6 million, or $0.07 per share compared to a net income of $0.8 million, or $0.02 per diluted share for the same period a year ago. As discussed above, the Company incurred a one-time charge of $795,000 or $0.02 per share, as discussed above. Revenue increased to $1.0 billion for the nine-month period ended September 30, 2008 from $888.5 million reported in the same period of last year. Guidance Looking forward, without CAP and UHG, the Company expects to see further sales growth and gross profit margins to normalize normalize to convert a set of data by, for example, converting them to logarithms or reciprocals so that their previous non-normal distribution is converted to a normal one. in the range of 10.5% to 11%. The Company has identified those operating expenses directly related to both CAP and UHG that will be eliminated. Management continues to examine its cost structure to find additional ways to improve operating performance. Furthermore, as a result of anticipated profits and exiting the CAP agreement, the Company will see an improvement in its liquidity and cash flow. Conference Call Information BioScrip will host a conference call to discuss third quarter 2008 financial results on Thursday, November 4, at 10:30 a.m. ET. Interested parties may participate in the conference call by dialing 800-954-1053 (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 November 4, through 12:00 p.m. ET on November 11, by dialing 800-633-8284 (US), or 402-977-9140 (International), and entering reservation #21397034. An audio webcast and archive of the conference call will also be available under the investor relations Investor relations The process by which the corporation communicates with its investors. 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 The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements regarding, among other things, the intent, belief or current expectations of the Company, its directors, or its officers with respect to the future operating performance, the profitability or lack of profitability of certain customers, the impact on profitability on changes in payer and product mix and the achievement of cost savings initiatives 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") and pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income are 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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