UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 10, 2015
BIOSCRIP, INC.
(Exact name of Registrant as specified in
its charter)
| Delaware |
|
000-28740 |
|
05-0489664 |
| (State of Incorporation) |
|
(Commission File Number) |
|
(I.R.S. Employer
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
N/A
(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:
| ¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 – Financial Information
Item 2.02. Results of Operations and Financial Condition.
On August 10, 2015, BioScrip, Inc. (the
“Company”) issued a press release reporting its 2015 second quarter financial results. A copy of the press release
is furnished with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Section 8 – Other Events
Item 8.01. Other Events.
As previously announced, the Company will
host a conference call to discuss its 2015 second quarter financial results on August 10, 2015 at 8:30 a.m. Eastern Time. Interested
parties may participate in the conference call by dialing 800-732-8470 (U.S.) or 212-231-2902 (International) 5-10 minutes prior
to the start of the call. An investor presentation complementary to the conference call will also be available prior to the start
of the call under the “Investor Relations” section of the Company’s website at www.bioscrip.com.
A replay of the conference call will be available for two weeks after the call's completion by dialing 800-633-8284 (U.S.) or
402-977-9140 (International) and entering conference call ID number 21773453. An audio webcast and archive including the investor
presentation will also be available for 30 days under the “Investor Relations” section of the Company’s website
at www.bioscrip.com.
The press release includes certain non-GAAP
financial measures as described therein. As required by Regulation G, reconciliation between any non-GAAP financial measures presented
and the most directly comparable GAAP financial measures is also provided.
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits.
| (d) |
Exhibits. |
| |
See the Exhibit Index which is hereby incorporated by reference. |
As provided in General Instruction B.2 to
Form 8-K, the information furnished in Item 2.02 and in Exhibit 99.1 hereto, as it relates to the Company’s financial results
for the quarter ended June 30, 2015, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall
not be deemed incorporated by reference into any filing of the Company with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly provided by specific reference in such filing.
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 hereunto duly authorized.
| |
BIOSCRIP, INC. |
| |
|
|
| Date: August 10, 2015 |
/s/ Jeffrey M. Kreger |
| |
By: |
Jeffrey M. Kreger |
| |
|
Senior Vice President, Chief Financial Officer and Treasurer |
Exhibit
Index
| Exhibit Number | Description |
| 99.1 | Press Release issued by the Company, dated August 10, 2015. |
Exhibit 99.1
PRESS RELEASE
Contact:
Lisa Wilson
In-Site Communications, Inc.
T: 212-452-2793
E: lwilson@insitecony.com
FOR IMMEDIATE RELEASE
BIOSCRIP REPORTS SECOND
QUARTER 2015 FINANCIAL RESULTS
Elmsford, NY – August 10, 2015 – BioScrip®,
Inc. (NASDAQ: BIOS) (the “Company”) today announced 2015 second quarter financial results. Second quarter revenue from
continuing operations was $262.4 million and the net loss from continuing operations was $243.2 million, or $3.60 loss per diluted
share, which includes a $238.0 million pre-tax goodwill impairment charge resulting from a decline in the Company’s common
stock price and related market capitalization, as well as an $8.6 million incremental pre-tax bad debt charge predominately attributable
to aged accounts receivable balances over 365 days old.
Company Highlights During and Subsequent to the Second
Quarter:
| · | Total revenue increased by $15.2 million, or 6.2%, compared to the
prior year period. Revenue from the Infusion Services segment increased to $247.0 million, reflecting 7.1% growth year-over-year,
driven by revenue growth in our core infusion business; |
| · | Gross profit from continuing operations was $66.0 million, or 25.1%
of revenue, compared to $65.4 million, or 26.4% of revenue, in the prior year period; |
| · | Consolidated Adjusted EBITDA was a loss of $2.5 million, a $13.5 million
decrease compared to Adjusted EBITDA of $11.0 million in the prior year period. The decrease was primarily due to a lower gross
margin revenue mix shift as well as the increase of contractual and bad debt expense; and |
| · | In a separate press release, the Company also announced today that
it is implementing a financial improvement plan to reduce its cost structure and enhance its financial flexibility to drive shareholder
value as a pure play infusion services provider. |
Results of Operations
Second Quarter 2015 versus Second Quarter 2014
Revenue from continuing operations for the second quarter of
2015 totaled $262.4 million, compared to $247.1 million for the same period a year ago, an increase of $15.2 million or 6.2%. Infusion
Services segment revenue was $247.0 million in the second quarter of 2015 as compared to $230.5 million for the same period in
2014. The 7.1% increase was driven primarily by continued strong organic growth particularly in chronic, nutrition and other therapies.
Consolidated gross profit for the second quarter of 2015 was
$66.0 million, or 25.1% of revenue, compared to $65.4 million, or 26.4% of revenue, for the second quarter of 2014. The increase
in gross profit dollars was due to revenue growth in the Infusion Services segment partially offset by lower PBM Services gross
profit. The decrease in gross margin percentage was primarily the result of an Infusion Services segment mix shift from core therapies
to more chronic and other therapies.
During the second quarter of 2015, consolidated Adjusted EBITDA
from continuing operations declined by $13.5 million to a loss of $2.5 million. Infusion Services segment Adjusted EBITDA was $4.1
million in the second quarter of 2015, compared to Adjusted EBITDA of $16.2 million in the prior year quarter. The decreases in
both consolidated Adjusted EBITDA and Infusion Services segment Adjusted EBITDA were principally due to lower gross margin revenue
mix shift combined with the $8.6 million incremental pre-tax bad debt charge, which was predominately attributable to aged accounts
receivable balances over 365 days old.
PBM Services segment revenue was $15.4 million for the second
quarter of 2015, compared to $16.6 million for the prior year period. PBM Services segment Adjusted EBITDA was $1.7 million for
the second quarter of 2015, compared to $1.8 million in the prior year quarter.
Interest expense in the second quarter of 2015 was unchanged
from the prior year period at $9.1 million.
Income tax benefit for continuing operations in the second quarter
of 2015 was $19.9 million compared to income tax expense of $3.1 million in the prior year period.
Net loss from continuing operations for the second quarter
of 2015 was $243.2 million, or a $3.60 loss per diluted share, compared to a net loss of $18.6 million, or $0.27 loss per
diluted share in the prior year period, largely due to the $238.0 million pre-tax goodwill impairment charge and the $8.6
million incremental pre-tax bad debt charge
Liquidity and Capital Resources
For the six months ended June 30, 2015, BioScrip used $42.1
million in net cash from continuing operating activities, as compared to $26.7 million of net cashed used in continuing operating
activities in the prior year period. As of June 30, 2015, the Company had $1.2 million in cash and $418.9 million of outstanding
debt. As of August 10, 2015, the Company has approximately $54.4 million of liquidity, which is comprised of $22.6 million of cash
and $31.8 million of undrawn capacity available on its revolving credit facility.
Events Subsequent to the End of the Second Quarter
In a separate press release issued today, BioScrip announced
steps to enhance shareholder value as a pure play infusion services provider:
| · | Implementing $35 - $40 million in total cost savings over the next
12 months to enhance financial flexibility; |
| · | Announcing sale of non-core PBM business; |
| · | Retaining Jefferies to explore strategic alternatives; and |
| · | Naming Chris Luthin as Chief Operating Officer; Scott Davido as Chief
Implementation Officer and announces additional executive appointments. |
Conference Call and Presentation
BioScrip will host a conference call and live webcast today,
August 10, 2015 at 8:30 a.m. Eastern Time, to discuss its second quarter 2015 financial results and its separately announced plan
to enhance shareholder value as a pure play infusion services provider. Interested parties may participate by dialing 800-732-8470
(US), or 212-231-2902 (International) or accessing a link on the Company’s website at www.bioscrip.com. The Company is also
providing supplemental slides that will be posted prior to the conference call and will be accessible through the “Investor
Relations” section of the BioScrip website at www.bioscrip.com.
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
21773453. An audio webcast and archive will also be available for 30 days under the "Investor Relations" section of the
Company’s website.
About BioScrip, Inc.
BioScrip, Inc. is a leading national provider of infusion and
home care management solutions. BioScrip partners with physicians, hospital systems, skilled nursing facilities, 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.
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 future levels
of certain charges and expenses, and other statements regarding the Company's financial improvement plan 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," "outlook," "aim," "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 implement its financial improvement plan to reduce operating costs and focus its business on its Infusion
Services segment; 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. 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 Adjusted EBITDA (including segment
Adjusted EBITDA) and Adjusted EPS, which are non-GAAP financial measures. Adjusted EBITDA and Adjusted EPS are not measurements
of financial performance under GAAP and should not be used in isolation or as a substitute or alternative to net income, operating
income or any other performance measure derived in accordance with GAAP, or as a substitute or alternative to cash flow from operating
activities or a measure of our liquidity. In addition, the Company's definitions of Adjusted EBITDA and Adjusted EPS may not be
comparable to similarly titled non-GAAP financial measures reported by other companies. Adjusted EBITDA, as defined by the Company,
represents net income before net interest expense, loss on sale of assets, income tax expense, depreciation and amortization, impairment
of goodwill, stock-based compensation expense, acquisition and integration expenses, restructuring-related expenses and investments
in start-up operations. As part of restructuring, the Company may incur significant charges such as the write down of certain long−lived
assets, temporary redundant expenses, retraining expenses, potential cash bonus payments and potential accelerated payments or
terminated costs for certain of its contractual obligations. Adjusted EPS, as defined by the Company, represents earnings per basic
and diluted share, excluding stock-based compensation expense, acquisition and integration expenses, impairment of goodwill, loss
on sale of assets, restructuring-related expenses and investments in start-up operations as well as the impact of acquisition-related
intangible amortization. Management believes that these non-GAAP financial measures provide useful supplemental information regarding
the performance of our business operations and facilitates comparisons to our historical operating results. For a full reconciliation
of Adjusted EBITDA and Adjusted EPS to the most comparable GAAP financial measures, please see the attachments to this earnings
release.
TABLES FOLLOW
| Schedule 1 |
| BIOSCRIP, INC. AND SUBSIDIARIES |
| |
|
|
|
| CONSOLIDATED BALANCE SHEETS |
| (in thousands, except for share amounts) |
| | |
June 30, 2015 | | |
December 31, 2014 | |
| | |
(unaudited) | | |
| |
| ASSETS | |
| | | |
| | |
| Current assets | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 1,172 | | |
$ | 740 | |
| Receivables, less allowance for doubtful accounts of $72,332 and $66,500 as of June 30, 2015 and December 31, 2014, respectively | |
| 131,471 | | |
| 140,810 | |
| Inventory | |
| 42,364 | | |
| 37,215 | |
| Prepaid expenses and other current assets | |
| 10,396 | | |
| 9,450 | |
| Total current assets | |
| 185,403 | | |
| 188,215 | |
| Property and equipment, net | |
| 34,906 | | |
| 38,171 | |
| Goodwill | |
| 335,323 | | |
| 573,323 | |
| Intangible assets, net | |
| 7,290 | | |
| 10,269 | |
| Deferred financing costs | |
| 13,035 | | |
| 13,463 | |
| Other non-current assets | |
| 1,192 | | |
| 1,272 | |
| Total assets | |
$ | 577,149 | | |
$ | 824,713 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
| Current liabilities | |
| | | |
| | |
| Current portion of long-term debt | |
$ | 238 | | |
$ | 5,395 | |
| Accounts payable | |
| 77,085 | | |
| 90,032 | |
| Claims payable | |
| 4,816 | | |
| 8,162 | |
| Amounts due to plan sponsors | |
| 4,254 | | |
| 5,779 | |
| Accrued interest | |
| 6,705 | | |
| 6,853 | |
| Accrued expenses and other current liabilities | |
| 40,923 | | |
| 46,092 | |
| Total current liabilities | |
| 134,021 | | |
| 162,313 | |
| Long-term debt, net of current portion | |
| 418,619 | | |
| 418,408 | |
| Deferred taxes | |
| 2,924 | | |
| 19,058 | |
| Other non-current liabilities | |
| 6,891 | | |
| 8,129 | |
| Total liabilities | |
| 562,455 | | |
| 607,908 | |
| Series A convertible preferred stock, $.0001 par value; 825,000 shares authorized; 625,000 shares issued and outstanding; and, $64,758 liquidation preference as of June 30, 2015. No preferred stock was authorized or outstanding as of December 31, 2014. | |
| 57,988 | | |
| - | |
| Stockholders' equity | |
| | | |
| | |
| Preferred stock, $.0001 par value; 4,175,000 and 5,000,000 shares authorized as of June 30, 2015 and December 31, 2014, respectively; no shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | |
| - | | |
| - | |
| Common stock, $.0001 par value; 125,000,000 shares authorized; 71,376,164 and 71,274,064 shares issued and 68,730,871 and 68,636,965 shares outstanding as of June 30, 2015 and December 31, 2014, respectively | |
| 8 | | |
| 8 | |
| Treasury stock, 2,645,293 and 2,637,099 shares at cost as of June 30, 2015 and December 31, 2014, respectively | |
| (10,715 | ) | |
| (10,679 | ) |
| Additional paid-in capital | |
| 534,100 | | |
| 529,682 | |
| Accumulated deficit | |
| (566,687 | ) | |
| (302,206 | ) |
| Total stockholders' equity (deficit) | |
| (43,294 | ) | |
| 216,805 | |
| Total liabilities and stockholders' equity | |
$ | 577,149 | | |
$ | 824,713 | |
| Schedule 2 |
| BIOSCRIP, INC. AND SUBSIDIARIES |
| |
|
|
|
|
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (in thousands, except per share amounts) |
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Product revenue | |
$ | 241,020 | | |
$ | 225,277 | | |
$ | 480,067 | | |
$ | 441,180 | |
| Service revenue | |
| 21,343 | | |
| 21,848 | | |
| 43,977 | | |
| 45,238 | |
| Total
revenue | |
| 262,363 | | |
| 247,125 | | |
| 524,044 | | |
| 486,418 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of product revenue | |
| 176,763 | | |
| 161,658 | | |
| 350,710 | | |
| 313,398 | |
| Cost of service revenue | |
| 19,634 | | |
| 20,111 | | |
| 40,895 | | |
| 42,564 | |
| Total
cost of revenue | |
| 196,397 | | |
| 181,769 | | |
| 391,605 | | |
| 355,962 | |
| | |
| | | |
| | | |
| | | |
| | |
| Gross
profit | |
| 65,966 | | |
| 65,356 | | |
| 132,439 | | |
| 130,456 | |
| % of revenues | |
| 25.1 | % | |
| 26.4 | % | |
| 25.3 | % | |
| 26.8 | % |
| | |
| | | |
| | | |
| | | |
| | |
| Selling, general and administrative expenses | |
| 60,367 | | |
| 57,244 | | |
| 118,140 | | |
| 116,424 | |
| Change in fair value of contingent consideration | |
| (93 | ) | |
| (4,646 | ) | |
| (72 | ) | |
| (6,855 | ) |
| Bad debt expense | |
| 15,146 | | |
| 8,360 | | |
| 23,466 | | |
| 14,961 | |
| Impairment of goodwill | |
| 238,000 | | |
| - | | |
| 238,000 | | |
| - | |
| Acquisition and integration expenses | |
| 259 | | |
| 5,333 | | |
| 479 | | |
| 11,832 | |
| Restructuring and other expenses | |
| 4,803 | | |
| 3,858 | | |
| 8,266 | | |
| 8,450 | |
| Amortization of intangibles | |
| 1,489 | | |
| 1,620 | | |
| 2,979 | | |
| 3,323 | |
| Loss
from continuing operations | |
| (254,005 | ) | |
| (6,413 | ) | |
| (258,819 | ) | |
| (17,679 | ) |
| Interest expense, net | |
| 9,080 | | |
| 9,135 | | |
| 18,243 | | |
| 19,634 | |
| Loss
from continuing operations, before income taxes | |
| (263,085 | ) | |
| (15,548 | ) | |
| (277,062 | ) | |
| (37,313 | ) |
| Income tax expense (benefit) | |
| (19,921 | ) | |
| 3,063 | | |
| (17,993 | ) | |
| 6,554 | |
| Loss
from continuing operations, net of income taxes | |
| (243,164 | ) | |
| (18,611 | ) | |
| (259,069 | ) | |
| (43,867 | ) |
| Loss from discontinued operations, net of income taxes | |
| (1,644 | ) | |
| (1,207 | ) | |
| (5,412 | ) | |
| (1,265 | ) |
| Net
loss | |
$ | (244,808 | ) | |
$ | (19,818 | ) | |
$ | (264,481 | ) | |
$ | (45,132 | ) |
| Accrued dividends on preferred stock | |
| (1,805 | ) | |
| - | | |
| (2,258 | ) | |
| - | |
| Deemed dividend on preferred stock | |
| (2,186 | ) | |
| - | | |
| (3,350 | ) | |
| - | |
| Loss
attributable to common stockholders | |
$ | (248,799 | ) | |
$ | (19,818 | ) | |
$ | (270,089 | ) | |
$ | (45,132 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Loss per common share: | |
| | | |
| | | |
| | | |
| | |
| Loss from continuing operations, basic and diluted | |
$ | (3.60 | ) | |
$ | (0.27 | ) | |
$ | (3.85 | ) | |
$ | (0.64 | ) |
| Loss from discontinued operations, basic and diluted | |
| (0.02 | ) | |
| (0.02 | ) | |
| (0.08 | ) | |
| (0.02 | ) |
| Net
loss, basic and diluted | |
$ | (3.62 | ) | |
$ | (0.29 | ) | |
$ | (3.93 | ) | |
$ | (0.66 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted
average shares outstanding, basic and diluted | |
| 68,698 | | |
| 68,468 | | |
| 68,668 | | |
| 68,354 | |
| Schedule 3 |
| BIOSCRIP, INC. AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY |
| (in thousands) |
| | |
| | |
| | |
| | |
Additional | | |
| | |
Total | |
| | |
Preferred | | |
Common | | |
Treasury | | |
Paid-In | | |
Accumulated | | |
Stockholders' | |
| | |
Stock | | |
Stock | | |
Stock | | |
Capital | | |
Deficit | | |
Equity | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balances at December 31, 2014 | |
$ | - | | |
$ | 8 | | |
$ | (10,679 | ) | |
$ | 529,682 | | |
$ | (302,206 | ) | |
$ | 216,805 | |
| Issuance of Series A convertible preferred stock and warrants | |
| - | | |
| - | | |
| - | | |
| 6,570 | | |
| - | | |
| 6,570 | |
| Accrued dividends on preferred stock | |
| - | | |
| - | | |
| - | | |
| (2,258 | ) | |
| - | | |
| (2,258 | ) |
| Deemed dividend on preferred stock | |
| - | | |
| - | | |
| - | | |
| (3,350 | ) | |
| - | | |
| (3,350 | ) |
| Compensation under employee stock compensation plan | |
| - | | |
| - | | |
| - | | |
| 3,454 | | |
| - | | |
| 3,454 | |
| Surrender of stock to satisfy minimum tax withholding | |
| - | | |
| - | | |
| (36 | ) | |
| 2 | | |
| - | | |
| (34 | ) |
| Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (264,481 | ) | |
| (264,481 | ) |
| Balances at June 30, 2015 | |
$ | - | | |
$ | 8 | | |
$ | (10,715 | ) | |
$ | 534,100 | | |
$ | (566,687 | ) | |
$ | (43,294 | ) |
| | |
| | |
| | |
| | |
Additional | | |
| | |
Total | |
| | |
Preferred | | |
Common | | |
Treasury | | |
Paid-In | | |
Accumulated | | |
Stockholders' | |
| | |
Stock | | |
Stock | | |
Stock | | |
Capital | | |
Deficit | | |
Equity | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Balances at December 31, 2013 | |
$ | - | | |
$ | 7 | | |
$ | (10,311 | ) | |
$ | 519,625 | | |
$ | (154,738 | ) | |
$ | 354,583 | |
| Exercise of stock options | |
| - | | |
| 1 | | |
| - | | |
| 905 | | |
| - | | |
| 906 | |
| Compensation under employee stock compensation plan | |
| - | | |
| - | | |
| - | | |
| 4,665 | | |
| - | | |
| 4,665 | |
| Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| (45,132 | ) | |
| (45,132 | ) |
| Balances at March 31, 2014 | |
$ | - | | |
$ | 8 | | |
$ | (10,311 | ) | |
$ | 525,195 | | |
$ | (199,870 | ) | |
$ | 315,022 | |
| Schedule 4 |
| BIOSCRIP, INC AND SUBSIDIARIES |
| |
| UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (in thousands) |
| | |
Six Months Ended June 30, | |
| | |
2015 | | |
2014 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net loss | |
$ | (264,481 | ) | |
$ | (45,132 | ) |
| Less: Loss from discontinued operations, net of income taxes | |
| (5,412 | ) | |
| (1,265 | ) |
| Loss from continuing operations, net of income taxes | |
| (259,069 | ) | |
| (43,867 | ) |
| Adjustments to reconcile (loss) from continuing operations, net of income taxes to net cash provided by (used in) operating activities: | |
| | | |
| | |
| Depreciation | |
| 8,434 | | |
| 7,794 | |
| Amortization of intangibles | |
| 2,979 | | |
| 3,323 | |
| Impairment of goodwill | |
| 238,000 | | |
| - | |
| Amortization of deferred financing costs and debt discount | |
| 1,792 | | |
| 2,745 | |
| Change in fair value of contingent consideration | |
| (72 | ) | |
| (6,855 | ) |
| Change in deferred income tax | |
| (15,834 | ) | |
| 6,358 | |
| Compensation under stock-based compensation plans | |
| 2,819 | | |
| 4,884 | |
| Loss on disposal of fixed assets | |
| 628 | | |
| - | |
| Changes in assets and liabilities, net of acquired business: | |
| | | |
| | |
| Receivables, net of bad debt expense | |
| 10,299 | | |
| (19,019 | ) |
| Inventory | |
| (5,149 | ) | |
| (58 | ) |
| Prepaid expenses and other assets | |
| (613 | ) | |
| 3,745 | |
| Accounts payable | |
| (12,912 | ) | |
| 6,105 | |
| Claims payable | |
| (3,346 | ) | |
| 1,475 | |
| Amounts due to plan sponsors | |
| (1,524 | ) | |
| 816 | |
| Accrued interest | |
| (148 | ) | |
| 4,764 | |
| Accrued expenses and other liabilities | |
| (8,335 | ) | |
| 1,116 | |
| Net cash used in operating activities from continuing operations | |
| (42,051 | ) | |
| (26,674 | ) |
| Net cash used in operating activities from discontinued operations | |
| (4,110 | ) | |
| (4,304 | ) |
| Net cash used in operating activities | |
| (46,161 | ) | |
| (30,978 | ) |
| Cash flows from investing activities: | |
| | | |
| | |
| Purchases of property and equipment, net | |
| (5,797 | ) | |
| (6,925 | ) |
| Cash consideration paid for acquisitions, net of cash acquired | |
| - | | |
| (454 | ) |
| Net cash used in investing activities from continuing operations | |
| (5,797 | ) | |
| (7,379 | ) |
| Net cash provided by investing activities from discontinued operations | |
| - | | |
| 57,688 | |
| Net cash provided by (used in) investing activities | |
| (5,797 | ) | |
| 50,309 | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from issuance of convertible preferred stock and warrants, net of issuance costs | |
| 58,951 | | |
| - | |
| Proceeds from senior notes due 2021, net of fees paid to lenders | |
| - | | |
| 193,868 | |
| Deferred and other financing costs | |
| (1,218 | ) | |
| (1,161 | ) |
| Borrowings on line of credit | |
| 129,163 | | |
| 85,400 | |
| Repayments on line of credit | |
| (134,163 | ) | |
| (125,403 | ) |
| Principal payments on long-term debt | |
| - | | |
| (172,243 | ) |
| Repayments of capital leases | |
| (345 | ) | |
| (151 | ) |
| Net proceeds from exercise of employee stock compensation plans | |
| 2 | | |
| 905 | |
| Net cash provided by (used in) financing activities from continuing operations | |
| 52,390 | | |
| (18,785 | ) |
| Net change in cash and cash equivalents | |
| 432 | | |
| 546 | |
| Cash and cash equivalents - beginning of period | |
| 740 | | |
| 1,001 | |
| Cash and cash equivalents - end of period | |
$ | 1,172 | | |
$ | 1,547 | |
| DISCLOSURE OF CASH FLOW INFORMATION: | |
| | | |
| | |
| Cash paid during the period for interest | |
$ | 18,931 | | |
$ | 12,232 | |
| Cash paid during the period for income taxes | |
$ | 515 | | |
$ | 349 | |
| Schedule 5 |
| BIOSCRIP, INC |
| |
| Reconciliation between GAAP and Non-GAAP Measures |
| (in thousands) |
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| | |
2015 | | |
2014 | | |
2015 | | |
2014 | |
| Results of Operations: | |
| | |
| | |
| | |
| |
| Revenue: | |
| | | |
| | | |
| | | |
| | |
| Infusion Services - product revenue | |
$ | 241,020 | | |
$ | 225,277 | | |
$ | 480,067 | | |
$ | 441,180 | |
| Infusion Services - service revenue | |
| 5,957 | | |
| 5,271 | | |
| 11,187 | | |
| 10,437 | |
| Total Infusion Services revenue | |
| 246,977 | | |
| 230,548 | | |
| 491,254 | | |
| 451,617 | |
| PBM Services - service revenue | |
| 15,386 | | |
| 16,577 | | |
| 32,790 | | |
| 34,801 | |
| Total revenue | |
$ | 262,363 | | |
$ | 247,125 | | |
$ | 524,044 | | |
$ | 486,418 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted EBITDA by Segment before corporate overhead: | |
| | | |
| | | |
| | | |
| | |
| Infusion Services | |
$ | 4,140 | | |
$ | 16,194 | | |
$ | 16,839 | | |
$ | 31,155 | |
| PBM Services | |
| 1,737 | | |
| 1,837 | | |
| 3,126 | | |
| 3,512 | |
| Total Segment Adjusted EBITDA | |
| 5,877 | | |
| 18,031 | | |
| 19,965 | | |
| 34,667 | |
| | |
| | | |
| | | |
| | | |
| | |
| Corporate overhead | |
| (8,411 | ) | |
| (7,016 | ) | |
| (16,179 | ) | |
| (14,492 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Consolidated Adjusted EBITDA | |
| (2,534 | ) | |
| 11,015 | | |
| 3,786 | | |
| 20,175 | |
| | |
| | | |
| | | |
| | | |
| | |
| Interest expense, net | |
| (9,080 | ) | |
| (9,135 | ) | |
| (18,243 | ) | |
| (19,634 | ) |
| Income tax (expense) benefit | |
| 19,921 | | |
| (3,063 | ) | |
| 17,993 | | |
| (6,554 | ) |
| Depreciation | |
| (4,130 | ) | |
| (3,958 | ) | |
| (8,434 | ) | |
| (7,794 | ) |
| Loss on sale of assets | |
| (628 | ) | |
| - | | |
| (628 | ) | |
| - | |
| Amortization of intangibles | |
| (1,489 | ) | |
| (1,620 | ) | |
| (2,979 | ) | |
| (3,323 | ) |
| Impairment of goodwill | |
| (238,000 | ) | |
| - | | |
| (238,000 | ) | |
| - | |
| Stock-based compensation expense | |
| (1,162 | ) | |
| (1,998 | ) | |
| (2,819 | ) | |
| (4,884 | ) |
| Acquisition and integration expenses | |
| (259 | ) | |
| (5,333 | ) | |
| (479 | ) | |
| (11,832 | ) |
| Restructuring and other expenses and investments (1) | |
| (5,803 | ) | |
| (4,519 | ) | |
| (9,266 | ) | |
| (10,021 | ) |
| Loss from continuing operations, net of income taxes | |
$ | (243,164 | ) | |
$ | (18,611 | ) | |
$ | (259,069 | ) | |
$ | (43,867 | ) |
| Supplemental Operating Data | |
June 30, | | |
December 31, | |
| | |
2015 | | |
2014 | |
| Total Assets: | |
| | | |
| | |
| Infusion Services | |
$ | 510,566 | | |
$ | 755,955 | |
| PBM Services | |
| 26,702 | | |
| 29,147 | |
| Corporate unallocated | |
| 39,881 | | |
| 39,611 | |
| Total
Assets | |
$ | 577,149 | | |
$ | 824,713 | |
(1) Restructuring and other expenses and investments
include costs associated with restructuring such as employee severance and other benefit-related costs, third party consulting
costs, facility-related costs and certain other costs; transitional costs such as training, redundant salaries, retention bonuses
for certain critical personnel, certain excess facility costs for locations not yet abandoned, professional fees and other costs
related to contract terminations and closed branches which are not classified as restructuring; and, in 2014, investments in start-up
branch locations.
| BIOSCRIP, INC |
| |
| Reconciliation between GAAP and Non-GAAP Earnings Per Share |
| (in thousands) |
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| | |
2015 1 | | |
2014 1 | | |
2015 1 | | |
2014 1 | |
| Net loss from continuing operations, net of income taxes | |
$ | (243,164 | ) | |
$ | (18,611 | ) | |
$ | (259,069 | ) | |
$ | (43,867 | ) |
| Accrued dividends on preferred stock | |
| (1,805 | ) | |
| - | | |
| (2,258 | ) | |
| - | |
| Deemed dividends on preferred stock | |
| (2,186 | ) | |
| - | | |
| (3,350 | ) | |
| - | |
| Loss attributable to common stockholders, from continuing operations | |
$ | (247,155 | ) | |
$ | (18,611 | ) | |
$ | (264,677 | ) | |
$ | (43,867 | ) |
| Non-GAAP adjustments, net of income tax: | |
| | | |
| | | |
| | | |
| | |
| Restructuring and other expenses 2 | |
| 5,803 | | |
| 4,519 | | |
| 9,266 | | |
| 10,021 | |
| Impairment of goodwill | |
| 238,000 | | |
| - | | |
| 238,000 | | |
| - | |
| Loss on sale of assets | |
| 628 | | |
| - | | |
| 628 | | |
| - | |
| Acquisition and integration expenses | |
| 259 | | |
| 5,333 | | |
| 479 | | |
| 11,832 | |
| Amortization of intangibles | |
| 1,489 | | |
| 1,620 | | |
| 2,979 | | |
| 3,323 | |
| Compensation under stock-based compensation plans | |
| 1,162 | | |
| 1,998 | | |
| 2,819 | | |
| 4,884 | |
| Non-GAAP net income (loss) from continuing operations | |
$ | 186 | | |
$ | (5,141 | ) | |
$ | (10,506 | ) | |
$ | (13,807 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Loss per share attributable to common stockholders, from continuing operations, basic and diluted | |
$ | (3.60 | ) | |
$ | (0.27 | ) | |
$ | (3.85 | ) | |
$ | (0.64 | ) |
| Non-GAAP adjustments, net of income tax: | |
| | | |
| | | |
| | | |
| | |
| Restructuring and other expenses 3 | |
| 0.08 | | |
| 0.07 | | |
| 0.13 | | |
| 0.15 | |
| Impairment of goodwill | |
| 3.46 | | |
| - | | |
| 3.47 | | |
| - | |
| Loss on sale of assets | |
| 0.01 | | |
| - | | |
| 0.01 | | |
| - | |
| Acquisition and integration expenses | |
| 0.00 | | |
| 0.08 | | |
| 0.01 | | |
| 0.17 | |
| Amortization of intangibles | |
| 0.02 | | |
| 0.02 | | |
| 0.04 | | |
| 0.05 | |
| Compensation under stock-based compensation plans | |
| 0.02 | | |
| 0.03 | | |
| 0.04 | | |
| 0.07 | |
| Non-GAAP loss per share from continuing operations, basic and diluted | |
$ | 0.00 | | |
$ | (0.08 | ) | |
$ | (0.15 | ) | |
$ | (0.20 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average shares outstanding, basic and diluted | |
| 68,698 | | |
| 68,468 | | |
| 68,668 | | |
| 68,354 | |
| 1 |
For the three and six months ended June 30, 2015 and 2014, non-GAAP net loss from continuing operations adjustments are net of tax, calculated using a year-to-date effective tax rate method. However, there is no tax impact for the three and six months ended June 30, 2015 and 2014 as the Company was in an overall taxable loss position. The Company has recorded a full valuation allowance on its deferred tax assets and, as a result, no tax benefit is being recognized for the non-GAAP net loss from continuing operations. |
| 2 |
Restructuring and other expenses and include costs associated with restructuring such as employee severance and other benefit-related costs, third party consulting costs, facility-related costs and certain other costs; transitional costs such as training, redundant salaries, retention bonuses for certain critical personnel, certain excess facility costs for locations not yet abandoned, professional fees and other costs related to contract terminations and closed branches which are not classified as restructuring; and, in 2014, investments in start-up branch locations. |
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