BioScrip Announces Third Quarter 2006 Financial Results.Significant Reduction in 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. ELMSFORD, N.Y. -- BioScrip, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : BIOS) today reported third quarter 2006 revenue of $280.9 million and a net loss of $3.4 million, or $0.09 per share compared to revenue of $279.6 million and a net loss of $5.7 million, or $0.15 per share for the second quarter. Revenue and net income for the third quarter of 2005 were $294.0 million and $0.6 million respectively, or $0.02 per diluted share. Third quarter earnings before interest, taxes, depreciation, amortization and option expense ("EBITDAO")1 was negative $0.7 million, compared to negative EBITDAO of $5.1 million in the prior quarter. EBITDAO for the third quarter of 2005 was $3.7 million. The Company adopted FAS 123(R) on January 1, 2006; as such, there was no stock option expense in the prior year's third quarter. Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Richard H. Friedman stated, "We established two main priorities at the end of the second quarter: to enhance liquidity through improved collections and to reduce expenses. We are pleased with the progress on both of these fronts. We reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. our collections department and implemented new policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental to ensure better collections at the point of sale. These actions have enabled us to lower our bad debt expense by $1.6 million from the second quarter. If our current trend continues, we believe that we will be able to reduce further bad debt expense as a percentage of revenues in the coming quarters. In addition, we identified and implemented approximately $7.5 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. cost reductions in the third quarter. "Although we continue to concentrate on improving collections and reducing costs, the key to long-term profitability is through revenue growth. Our Specialty Services business continues to perform well. We believe that infusion, new specialty product launches, and our Community focused platform will drive growth and profitability in the future. We are also beginning to realize revenue contribution from the Competitive Acquisition Program (CAP). It is early in the process and we hope to gradually see profitability from this program on a stand-alone basis." Third Quarter Results Third quarter 2006 revenue was $280.9 million compared to $294.0 million for the same period a year ago. Revenue decreases were primarily the result of the loss of PBM PBM - play by mail. See play by electronic mail. Services business, offset by increases in the Company's other business units, which included approximately $6.5 million of revenues associated with acquisitions since September 30, 2005. Third quarter 2006 Specialty Services revenue was $219.9 million, an increase of $23.9 million, or 12%, due primarily to sales of new biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. drugs, strong growth in infusion sales, the acquisition of Northland north·land also North·land n. A region in the north of a country or an area. north  land Pharmacy in October 2005 and the acquisition of Intravenous
Therapy Intravenous therapy or IV therapy is the giving of liquid substances directly into a vein. It can be intermittent or continuous; continuous administration is called an intravenous drip. Services ("ITS") in March 2006. Third quarter 2006 PBM
Services revenue was $61.0 million, a decrease of $36.9 million, or 38%,
from the prior year's third quarter, primarily due to the loss of
PBM Services contracts with Centene Corporation Centene Corporation is in the industry of Medicaid managed care.Centene is a multi-line healthcare enterprise operating primarily in two segments: Medicaid Managed Care and Specialty Services. , which was partially offset by increased traditional mail volume. Gross profit for the third quarter 2006 was $29.7 million, compared to $31.7 million for the same period of 2005. Gross profit was 10.6% of revenue in the third quarter 2006 compared to 10.8% in the comparable period of last year. Gross profit was 10.3% of revenue for the second quarter of 2006. Gross margin declines from 2005 were the result of program changes associated with the implementation of Medicare Part D on January 1, 2006 and industry-wide reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. pressures. Third quarter 2006 selling, general and administrative expenses ("SG&A") were $29.2 million, or 10% of total revenue, compared to $26.5 million, or 9% of total revenue for the third quarter 2005. SG&A expenses decreased $1.9 million from the second quarter of 2006. The increase in SG&A over 2005 was due primarily to the Company's incurrence of $0.3 million in severance expense related to staff reductions implemented during the third quarter, $1.8 million of ongoing operating expenses associated with acquisitions made by the Company since September 2005, and $0.6 million of stock option expense due to the adoption of FAS 123(R) on January 1, 2006. Bad debt expense in the third quarter improved to $2.8 million, or 1%, of revenue, compared to $4.4 million or 1.6% of revenue in the second quarter of 2006. Bad debt expense for the third quarter of 2005 was $1.5 million, or 0.5% of revenue. Net loss was $3.4 million, or $0.09 per share, for the third quarter 2006 compared with net income of $0.6 million, or $0.02 per share for the third quarter 2005. Nine-Month Results For the nine-month period ended September 30, 2006, revenue increased 12% to $860.2 million from $769.0 million reported in the same period of last year. Net loss for the nine-month period was $10.3 million, or $0.28 per share compared to net loss of $1.2 million, or $0.04 per share in the same period a year ago. Operating results for the nine-months ended September 30, 2005 include the Company's acquisition of Chronimed Inc. on March 12, 2005. Nine-month 2006 operating results include that acquisition for the entire period. Results for the current nine-month period also include $2.2 million of severance expense, $3.9 million of SG&A expense associated with acquired companies since September 2005, $6.0 million of increased bad debt expense and $1.7 million of non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) related to the adoption of FAS 123(R). Conference Call Information BioScrip will host a conference call to discuss third quarter 2006 financial results on Tuesday, November 7, 2006 at 10:00 AM EST EST electroshock therapy. EST abbr. electroshock therapy . Interested parties may participate in the conference call by dialing 800-731-1404 (US), or 415-537-1905 (International) 5-10 minutes prior to the start of the call. A replay of the conference call will be available from 12:00 PM EST on November 7, 2006 through 12:00 PM EST on November 14, 2006 by dialing 800-633-8284 (US), or 402-977-9140 (International), and entering reservation #21306985. A webcast and archive of the conference call will also be available in the investors section of the BioScrip website at www.bioscrip.com. 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 A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. 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 HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome , Cancer, Infusion IVIG IVIG Intravenous immunoglobulin, see there , Hepatitis C Hepatitis C Definition Hepatitis C is a form of liver inflammation that causes primarily a long-lasting (chronic) disease. Acute (newly developed) hepatitis C is rarely observed as the early disease is generally quite mild. , Rheumatoid Arthritis rheumatoid arthritis Chronic, progressive autoimmune disease causing connective-tissue inflammation, mostly in synovial joints. It can occur at any age, is more common in women, and has an unpredictable course. , 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 36 locations including community and infusion pharmacies in 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 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 the intent, belief or current expectations of the Company, its directors, or its officers with respect to the 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. 1 Earnings before interest, taxes, depreciation, amortization, and option expense ("EBITDAO") is a non-GAAP financial measure as defined under Securities and Exchange Commission Regulation G. As required by Regulation G, BioScrip has provided 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. FINANCIAL TABLES FOLLOW [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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