BioScrip Provides Business Update on Implementation of Financial Improvement Plan and Progress to Enhance Shareholder Value
January 19 2016 - 6:50AM
Review of Strategic Alternatives Continues
BioScrip, Inc. (NASDAQ:BIOS) (“BioScrip” or the “Company”) today
provided an update on the Company’s progress implementing its
Financial Improvement Plan to enhance shareholder value, improve
financial flexibility and position BioScrip for success in 2016. As
previously announced, the Company expects the Financial Improvement
Plan to realize $35 million – $40 million in annualized net cost
savings.
As the Company stated in its third quarter 2015 financial
results in November 2015, its Financial Improvement Plan is focused
on reducing costs, improving margins and aligning the Company’s
operations around a more focused core infusion business. Since the
end of the third quarter 2015 the Company:
- Substantially completed the previously announced targeted
workforce reduction and remains on track to deliver the expected
$19 million in annual cost savings in 2016;
- Achieved the anticipated additional supply chain program
initiatives that are expected to add $3 million in annual savings
in 2016;
- Effected the initiatives expected to reduce corporate costs by
$5 million in 2016; and
- Implemented cost reduction programs that are expected to reduce
infusion field costs by $5 million in 2016. These cost
reductions are in specific targeted areas that include improved
nursing utilization and productivity, travel expense, office
expense, and other variable cost categories.
Carter Pate, Chair of the Financial Improvement Plan Committee
of the Board of Directors, said, “We made significant progress
towards implementing our cost savings and financial improvement
initiatives during the fourth quarter. We continue to believe in
the strength of the Company’s infusion services platform and the
direction in which the business is heading.”
Rick Smith, President and Chief Executive Officer of BioScrip,
said, “Our preliminary results for the fourth quarter 2015 reflect
increased patients serviced in the fourth quarter compared to the
fourth quarter of 2014, continued progress in the successful
execution of our cost reduction initiatives and enhanced focus on
our operations. Our team is encouraged by our progress as we enter
2016. We are committed to realizing the benefits of the Financial
Improvement Plan and creating value for our shareholders.”
With the continued implementation of the Company’s financial
improvement programs, FTI Consulting’s engagement has concluded and
Scott Davido is no longer acting as chief implementation
officer.
Preliminary Fourth Quarter 2015 ExpectationsThe
Company also announced today certain unaudited preliminary fourth
quarter 2015 financial results. The Company anticipates total
patient census growth of approximately 4% in the fourth quarter of
2015 compared to the same period in 2014. The Company
anticipates Core Therapy patient census growth of approximately 9%
in the fourth quarter of 2015 compared to the same period in 2014.
Liquidity and Capital ResourcesDuring the
fourth quarter BioScrip generated increased cash collections
sequentially compared to the third quarter. In the fourth quarter,
the Company generated its highest quarterly infusion division cash
collection total for 2015. In addition, during the fourth
quarter the Company collected approximately $6.8 million on an
account receivable balance from a former PBM vendor. The Company
had retained this receivable, which was excluded from the sale of
the PBM business.
As of December 31, 2015, the Company had reduced the amount of
borrowings outstanding on its Revolving Line of Credit to $15
million compared to $30 million of borrowings outstanding as of
September 30, 2015. The Company improved its cash flow in 2015 and
expects to be operating cash flow positive in 2016. In addition,
the Company expects to pay down more than $12 million of bank term
debt in 2016 from operating cash flow.
Exploration of Strategic Alternatives As
previously announced, BioScrip is executing on its Financial
Improvement Plan and, with the assistance of its financial advisor,
is reviewing a range of strategic alternatives, which could
include, among other options, a potential sale or merger of the
Company. As noted previously, the exploration of strategic
alternatives will not necessarily result in any changes to the
Company's current business plan and Financial Improvement Plan or
any transactions or agreements. The Company does not intend to
disclose developments regarding the exploration of strategic
alternatives unless and until a final decision is made.
BioScrip Fourth Quarter 2015 Results Call The
Company expects to announce the release date of its fourth quarter
2015 financial results within the next four weeks.
About BioScrip, Inc.BioScrip, Inc. is a leading
national provider of infusion and home healthcare management
solutions. BioScrip partners with healthcare providers, including
physicians, hospital systems, skilled nursing facilities, and with
healthcare payors to provide patients better access to high
quality, efficient post-acute care services. BioScrip operates with
a commitment to bring infusion therapy services into the home or
alternate-site settings. 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 HarborThis
press release includes statements that may constitute
"forward-looking statements," including projections of certain
measures of the Company's results of operations, liquidity,
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 continue to execute and achieve results
under 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.
Lisa Wilson
In-Site Communications, Inc.
T: 212-452-2793
E: lwilson@insitecony.com
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