ELMSFORD, N.Y.--(BUSINESS WIRE)--BioScrip, Inc. (NASDAQ: BIOS) today announced 2012 second quarter financial results. Second quarter revenue, from continuing operations, was $155.9 million and net loss, from continuing operations, was $4.3 million, or $0.07 per diluted share. Consolidated Adjusted EBITDA for the second quarter was $9.0 million.
As a result of the sale of the Company’s traditional and specialty pharmacy mail operations and community retail pharmacy stores on May 4, 2012 (the “Pharmacy Services Asset Sale”), the Company’s financial statements reflect the discontinued operations’ results for the three months ended June 30, 2012 and 2011 and assets transferred in the transaction as of June 30, 2012 and December 31, 2011, separate from the continuing operations of the business. The remaining assets and liabilities of the divested business that were not transferred as a part of the Pharmacy Services Asset Sale are included in continuing operations. The Company anticipates the collection, payment or resolution of these balances during the remainder of the year.
During the first quarter of 2012, the Company changed its operating and reportable segments from “Infusion/Home Health Services” and “Pharmacy Services” to its new operating and reportable segments: “Infusion Services,” “Home Health Services,” and “PBM Services.” As a result, prior period financial statements and related disclosures have been reclassified to conform to the current year presentation, and we have included the quarterly financial statements for 2011 as part of this release.
Second Quarter Highlights
- Revenue from continuing operations increased $24.3 million or 18.5% compared to prior year;
- Gross profit from continuing operations was $53.0 million or 34.0% of revenue, compared to $51.8 million or 39.4% of revenue in the prior year;
- Adjusted EBITDA from continuing operations was $9.0 million, compared to $11.5 million in the prior year and $8.4 million in the first quarter, a 7.5% sequential quarter improvement; and
- The Company completed the Pharmacy Services Asset Sale.
Acquisition of InfuScience
On July 31, 2012, BioScrip acquired privately held InfuScience, Inc. (“InfuScience”) for $38.0 million in cash. The purchase price could increase an additional $3.0 million based on the results of operations during the 24 month period following the closing. Headquartered in Gurnee, IL, InfuScience acquires, develops and operates businesses providing alternate site infusion pharmacy services. InfuScience generates approximately $40.0 million in annual revenue and has five infusion centers located in Eagan, Minnesota; Omaha, Nebraska; Chantilly, Virginia; Charleston, South Carolina; and Savannah, Georgia.
“The second quarter results demonstrate our progress in executing on our strategic plan,” said Rick Smith, President and Chief Executive Officer of BioScrip. “We were able to close on the divestiture of the non-core pharmacy services assets and redeploy a portion of the proceeds towards the acquisition of InfuScience, while delivering sequential improvement on our Adjusted EBITDA.”
Smith continued, “The InfuScience transaction is consistent with our stated goal of building our infusion business through strategic and opportunistic acquisitions, which meet our financial criteria and build our national presence. We are pleased to have the InfuScience team join us and believe their focus on clinical excellence and high-touch service model are consistent with BioScrip’s customer-centric approach.”
Results of Operations
Second Quarter 2012 versus Second Quarter 2011
Revenue from continuing operations for the second quarter of 2012 totaled $155.9 million, compared to $131.6 million for the same period a year ago, an increase of $24.3 million or 18.5%. Infusion Services segment revenue was $111.0 million in the second quarter, compared to revenue of $89.9 million for the same period in 2011, an increase of $21.1 million or 23.5%. This increase was driven primarily by volume growth. Home Health Services segment revenue for the second quarter of 2012 was $16.9 million compared to revenue of $17.7 million in the prior year, a decrease of $0.8 million or 4.6%. This decrease was primarily the result of reimbursement reductions from Medicare and the state of Tennessee TennCare program. PBM Services segment revenue for the second quarter of 2012 was $28.1 million, compared to $24.0 million for the prior year period, an increase of $4.0 million or 16.7%. Revenue in this segment benefitted from the addition of a new Managed Medicare contract in late 2011.
Consolidated gross profit for the second quarter of 2012 was $53.0 million, or 34.0% of revenue, compared to $51.8 million, or 39.4% of revenue, for the second quarter of 2011. The gross profit margin was impacted primarily by therapy mix in the Infusion Services segment. As previously anticipated, in connection with the Pharmacy Services Asset Sale, the Company continued to provide certain lower margin services on behalf of key customers during the second quarter. Additionally, there was a substantial decrease in cross referrals of certain therapies from the specialty sales personnel affiliated with the divested business. The Company believes the impact of these factors is short-term in nature.
During the second quarter of 2012, BioScrip generated $15.5 million of segment Adjusted EBITDA, or 9.9% of total revenue, compared to $16.9 million, or 12.8% of total revenue in the same period last year. The Infusion Services Segment Adjusted EBITDA was $8.0 million, or 7.2% of segment revenue, compared to $8.3 million, or 9.3% of segment revenue, in the prior year. These results were also affected by the Pharmacy Services Asset Sale as gross profit was impacted by the factors highlighted above and by an increased cost allocation to the Infusion Segment of certain retained corporate resources that are being redirected to grow and support the Infusion business.
The Home Health Services Segment Adjusted EBITDA in the second quarter of 2012 was $1.1 million, or 6.4% of segment revenue. This compares to Segment Adjusted EBITDA of $1.8 million, or 10.1% of segment revenue in the comparable prior year period. The PBM Services Segment Adjusted EBITDA was $6.4 million, or 22.7% of segment revenue, for the second quarter of 2012 compared to $6.8 million, or 28.1% of segment revenue, in the prior year.
On a consolidated basis, BioScrip reported $9.0 million of Adjusted EBITDA during the second quarter of 2012, or 5.8% of total revenue, compared to $11.5 million, or 8.8% of total revenue, in the same period last year. On a sequential basis, Adjusted EBITDA has increased by $0.6 million, or 7.5%, and Adjusted EBITDA as a percent of revenue from continuing operations has increased 0.4% from 5.4% to 5.8%.
Interest expense in the second quarter of 2012 was $6.8 million compared to $6.2 million in the prior year.
Income tax expense for continuing operations in the second quarter was $0.4 million compared to income tax benefit of $0.1 million in the second quarter of 2011. Income tax expense in Q2 2012 relates to state taxes and alternative minimum tax.
Net loss from continuing operations for the second quarter of 2012 was $4.3 million, or $0.07 per diluted share, compared to a net loss of $1.6 million, or $0.03 per diluted share, in the comparable prior year period.
Six Months Ended 2012 versus Six Months Ended 2011
Revenue from continuing operations for the six months ended June 30, 2012 totaled $311.5 million, compared to $262.4 million for the same period a year ago, an increase of $49.1 million or 18.7%. Infusion Services segment revenue was $220.0 million for the six months ended June 30, 2010, compared to revenue of $181.6 million for the same period in 2011, an increase of $38.4 million or 21.2%. This increase was driven primarily by volume growth. Home Health Services segment revenue for the six months ended June 30, 2012 was $33.6 million compared to revenue of $34.9 million in the prior year, a decrease of $1.3 million or 3.8%. This decrease was primarily the result of reimbursement reductions from Medicare and the state of Tennessee TennCare program. PBM Services segment revenue for the six months ended June 30, 2012 was $57.9 million, compared to $46.0 million for the prior year period, an increase of $12.0 million or 26.1%. The performance in this segment was impacted by the addition of a new Managed Medicare contract in late 2011.
Consolidated gross profit for the six months ended June 30, 2012 was $106.6 million, or 34.2% of revenue, compared to $103.2 million, or 39.3% of revenue, in the comparable prior year period. The gross profit margin was impacted primarily by therapy mix in the Infusion Services segment. As previously anticipated, in connection with the Pharmacy Services Asset Sale, the Company continued to provide certain lower margin services on behalf of key customers during the first half of the year. Additionally, there was a substantial decrease in cross referrals of certain therapies from the specialty sales personnel affiliated with the divested business. The Company believes the impact of these factors is short-term in nature.
During the six months ended June 30, 2012, BioScrip generated $30.4 million of segment Adjusted EBITDA, or 9.8% of total revenue, compared to $33.3 million, or 12.7% of total revenue in the same period last year. The Infusion Services Segment Adjusted EBITDA was $15.8 million, or 7.2% of segment revenue, compared to $17.6 million, or 9.7% of segment revenue, in the prior year. These results were also affected by the Pharmacy Services Asset Sale as gross profit was impacted by the factors highlighted above and by an increased cost allocation to the Infusion Segment of certain retained corporate resources that are being redirected to grow and support the Infusion business.
The Home Health Services Segment Adjusted EBITDA for the six months ended June 30, 2012 was $2.2 million, or 6.4% of segment revenue. This compares to Segment Adjusted EBITDA of $2.8 million, or 8.0% of segment revenue in the comparable prior year period. The PBM Services Segment Adjusted EBITDA was $12.5 million, or 21.5% of segment revenue, for the six months ended June 30, 2012 compared to $12.9 million, or 28.0% of segment revenue, in the prior year.
On a consolidated basis, BioScrip reported $17.4 million of Adjusted EBITDA for the six months ended June 30, 2012, or 5.6% of total revenue, compared to $21.3 million, or 8.1% of total revenue, in the same period last year.
Interest expense for the six months ended June 30, 2012 was $13.4 million compared to $12.8 million in the prior year.
Income tax benefit for continuing operations for the six months ended June 30, 2012 was $0.1 million compared to income tax benefit of $0.5 million in 2011.
Net loss from continuing operations for the six months ended June 30, 2012 was $6.3 million, or $0.11 per diluted share, compared to a net loss of $2.7 million, or $0.05 per diluted share, in the comparable prior year period.
2011 Quarterly Financial Data, Restated for Discontinued Operations
A summary of quarterly financial information, restated to exclude discontinued operations, for the year ended December 31, 2011 is as follows (in thousands):
| First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||||||||||||||||
| Results of Operations: | ||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||
| Infusion Services | $ | 91,725 | $ | 89,853 | $ | 90,246 | $ | 102,458 | ||||||||||||||
| Home Health Services | 17,208 | 17,673 | 17,548 | 17,206 | ||||||||||||||||||
| PBM Services | 21,904 | 24,049 | 26,036 | 38,600 | ||||||||||||||||||
| Total revenue | $ | 130,837 | $ | 131,575 | $ | 133,830 | $ | 158,264 | ||||||||||||||
| Adjusted EBITDA by Segment before corporate overhead: | ||||||||||||||||||||||
| Infusion Services | $ | 9,284 | $ | 8,340 | $ | 7,557 | $ | 9,947 | ||||||||||||||
| Home Health Services | 1,006 | 1,787 | 1,663 | 1,498 | ||||||||||||||||||
| PBM Services | 6,123 | 6,764 | 7,961 | 9,274 | ||||||||||||||||||
| Total Segment Adjusted EBITDA | 16,413 | 16,891 | 17,181 | 20,719 | ||||||||||||||||||
| Corporate overhead | (6,650 | ) | (5,362 | ) | (5,443 | ) | (5,853 | ) | ||||||||||||||
| Consolidated Adjusted EBITDA | 9,763 | 11,529 | 11,738 | 14,866 | ||||||||||||||||||
| Interest expense, net | (6,612 | ) | (6,235 | ) | (6,528 | ) | (6,167 | ) | ||||||||||||||
| Income tax benefit (expense) | 417 | 127 | 1,862 | (2,841 | ) | |||||||||||||||||
| Depreciation | (1,333 | ) | (1,647 | ) | (1,784 | ) | (1,827 | ) | ||||||||||||||
| Amortization of intangibles | (819 | ) | (819 | ) | (858 | ) | (880 | ) | ||||||||||||||
| Stock-based compensation expense | (1,132 | ) | (1,120 | ) | (1,731 | ) | (484 | ) | ||||||||||||||
| Acquisition, integration, severance and other employee costs | - | - | (1,284 | ) | (190 | ) | ||||||||||||||||
| Restructuring expense | (1,299 | ) | (3,475 | ) | (1,750 | ) | 89 | |||||||||||||||
| Income (loss) from continuing operations, net of income taxes | $ | (1,015 | ) | $ | (1,640 | ) | $ | (335 | ) | $ | 2,566 | |||||||||||
Liquidity and Capital Resources
For the six months ended June 30, 2012, BioScrip generated $42.8 million in net cash from continuing operating activities compared to $9.5 million generated from operating activities during the first six months of 2011, an increase of $33.3 million. This increase was due to the collection of accounts receivable retained after the Pharmacy Services Asset Sale, net of accounts payable paid related to those businesses. The Company’s cash balance at the end of the second quarter was $138.4 million.
The Company’s outstanding debt as of June 30, 2012 was comprised of $30.0 million under its revolving credit facility and $225.0 million of senior unsecured notes. The Company continues to evaluate options to deploy its capital resources, taking into account its cost of capital as well as growth opportunities in support of its strategic plan.
Outlook
The Company is increasing its target annualized revenue from $600-$620 million to $620-$650 million, and reiterating its annualized Adjusted EBITDA of $62-65 million in the fourth quarter of 2012. As previously disclosed, the Company anticipates certain short-term factors and additional costs during the third quarter of 2012 will impact near-term financial results.
Conference Call
BioScrip will host a conference call to discuss its second quarter 2012 financial results on August 9, 2012 at 9:00 a.m. Eastern Time. Interested parties may participate in the conference call by dialing 800-750-5857 (US), or 212-231-2921 (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 21600696. An audio webcast and archive will also be available under the “Investor Relations” section of the BioScrip website at www.bioscrip.com for a period of 30 days following the conference call.
About BioScrip, Inc.
BioScrip, Inc. provides comprehensive infusion and home care solutions. By partnering with patients, physicians, healthcare payors, government agencies and pharmaceutical manufacturers we are able to provide access to infusible medications and management solutions. Our goal is to optimize outcomes for chronic and other complex healthcare conditions and enhance the quality of patient life. BioScrip brings unsurpassed clinical competence in providing high-touch, comprehensive infusion and nursing services to patients in the most convenient ways possible. Through our customer services and treatments we aim to ensure the best possible therapy outcome.
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 grow its Infusion 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 payor 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, 2012. 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 and Adjusted EBITDA, which are non-GAAP financial measures. EBITDA and Adjusted EBITDA 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 EBITDA and Adjusted EBITDA may not be comparable to similarly titled non-GAAP financial measures reported by other companies. EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization. Adjusted EBITDA, as defined by the Company, represents net income before net interest expense, income tax expense, depreciation and amortization, stock-based compensation expense, acquisition, integration, severance and other employee costs, and restructuring-related expenses. 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. Management believes these non-GAAP financial measures provide additional important insight into the Company’s ongoing operations and meaningful metrics to evidence the Company's continuing profitability trend. For a full reconciliation of EBITDA and Adjusted EBITDA to the most comparable GAAP financial measures, please see the attachments to this earnings release.
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Schedule 1 |
|||||||||||||
| BIOSCRIP, INC | |||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||
| (in thousands, except for share amounts) | |||||||||||||
| June 30, | December 31, | ||||||||||||
| 2012 | 2011 | ||||||||||||
| (unaudited) | |||||||||||||
| ASSETS | |||||||||||||
| Current assets | |||||||||||||
| Cash and cash equivalents | $ | 138,423 | $ | - | |||||||||
| Receivables, less allowance for doubtful accounts of $22,719 and $22,728 | |||||||||||||
| at June 30, 2012 and December 31, 2011, respectively | 146,469 | 225,412 | |||||||||||
| Inventory | 21,242 | 17,997 | |||||||||||
| Prepaid expenses and other current assets | 5,725 | 10,184 | |||||||||||
| Current assets from discontinued operations | - | 38,876 | |||||||||||
| Total current assets | 311,859 | 292,469 | |||||||||||
| Property and equipment, net | 20,857 | 26,951 | |||||||||||
| Goodwill | 312,387 | 312,387 | |||||||||||
| Intangible assets, net | 18,058 | 19,622 | |||||||||||
| Deferred financing costs | 3,353 | 3,992 | |||||||||||
| Investments in and advances to unconsolidated affiliate | 6,949 | - | |||||||||||
| Other non-current assets | 1,455 | 1,552 | |||||||||||
| Non-current assets from discontinued operations | - | 20,129 | |||||||||||
| Total assets | $ | 674,918 | $ | 677,102 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Current liabilities | |||||||||||||
| Current portion of long-term debt | $ | 31,230 | $ | 66,161 | |||||||||
| Accounts payable | 28,842 | 79,155 | |||||||||||
| Claims payable | 10,906 | 11,766 | |||||||||||
| Amounts due to plan sponsors | 25,681 | 25,219 | |||||||||||
| Accrued interest | 5,845 | 5,825 | |||||||||||
| Accrued expenses and other current liabilities | 36,493 | 32,648 | |||||||||||
| Total current liabilities | 138,997 | 220,774 | |||||||||||
| Long-term debt, net of current portion | 226,216 | 227,298 | |||||||||||
| Deferred taxes | 9,008 | 10,295 | |||||||||||
| Other non-current liabilities | 5,798 | 3,456 | |||||||||||
| Total liabilities | 380,019 | 461,823 | |||||||||||
| Stockholders' equity | |||||||||||||
| Preferred stock, $.0001 par value; 5,000,000 shares authorized; | |||||||||||||
| no shares issued or outstanding | - | - | |||||||||||
| Common stock, $.0001 par value; 125,000,000 shares authorized; shares issued: | |||||||||||||
| 59,115,499 and 57,800,791, respectively; shares outstanding: 56,534,396 and | |||||||||||||
| 55,109,038, respectively | 6 | 6 | |||||||||||
| Treasury stock, shares at cost: 2,582,520 and 2,638,421, respectively | (10,311 | ) | (10,461 | ) | |||||||||
| Additional paid-in capital | 385,931 | 375,525 | |||||||||||
| Accumulated deficit | (80,727 | ) | (149,791 | ) | |||||||||
| Total stockholders' equity | 294,899 | 215,279 | |||||||||||
| Total liabilities and stockholders' equity | $ | 674,918 | $ | 677,102 | |||||||||
| Schedule 2 | ||||||||||||||||||||||||||
| BIOSCRIP, INC | ||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||||
| (unaudited and in thousands, except per share amounts) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||
| Product revenue | $ | 108,557 | $ | 87,717 | $ | 215,360 | $ | 177,499 | ||||||||||||||||||
| Service revenue | 47,344 | 43,858 | 96,174 | 84,913 | ||||||||||||||||||||||
| Total revenue | 155,901 | 131,575 | 311,534 | 262,412 | ||||||||||||||||||||||
| Cost of product revenue | 75,120 | 56,667 | 147,446 | 114,276 | ||||||||||||||||||||||
| Cost of service revenue | 27,740 | 23,078 | 57,525 | 44,954 | ||||||||||||||||||||||
| Total cost of revenue | 102,860 | 79,745 | 204,971 | 159,230 | ||||||||||||||||||||||
| Gross profit | 53,041 | 51,830 | 106,563 | 103,182 | ||||||||||||||||||||||
| % of revenue | 34.0 | % | 39.4 | % | 34.2 | % | 39.3 | % | ||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | 44,692 | 40,430 | 89,354 | 81,829 | ||||||||||||||||||||||
| Bad debt expense | 3,772 | 2,638 | 7,237 | 5,293 | ||||||||||||||||||||||
| Acquisition and integration expenses | 636 | - | 808 | - | ||||||||||||||||||||||
| Restructuring expense | 202 | 3,475 | 502 | 4,774 | ||||||||||||||||||||||
| Amortization of intangibles | 878 | 819 | 1,757 | 1,638 | ||||||||||||||||||||||
| Total operating expense | 50,180 | 47,362 | 99,658 | 93,534 | ||||||||||||||||||||||
| % of revenue | 32.2 | % | 36.0 | % | 32.0 | % | 35.6 | % | ||||||||||||||||||
| Income from continuing operations | 2,861 | 4,468 | 6,905 | 9,648 | ||||||||||||||||||||||
| Interest expense, net | 6,790 | 6,235 | 13,359 | 12,847 | ||||||||||||||||||||||
| Loss from continuing operations before income taxes | (3,929 | ) | (1,767 | ) | (6,454 | ) | (3,199 | ) | ||||||||||||||||||
| Income tax expense (benefit) | 364 | (127 | ) | (138 | ) | (544 | ) | |||||||||||||||||||
| Loss from continuing operations, net of income taxes | (4,293 | ) | (1,640 | ) | (6,316 | ) | (2,655 | ) | ||||||||||||||||||
| Income (loss) from discontinued operations, net of income taxes | 76,059 | (686 | ) | 75,379 | 3,270 | |||||||||||||||||||||
| Net income (loss) | $ | 71,766 | $ | (2,326 | ) | $ | 69,063 | $ | 615 | |||||||||||||||||
| Basic weighted average shares | 55,746 | 54,298 | 55,143 | 54,216 | ||||||||||||||||||||||
| Diluted weighted average shares | 55,746 | 54,298 | 55,143 | 54,216 | ||||||||||||||||||||||
| Basic loss per share from continuing operations | $ | (0.07 | ) | $ | (0.03 | ) | $ | (0.11 | ) | $ | (0.05 | ) | ||||||||||||||
| Basic income (loss) per share from discontinued operations | 1.36 | (0.01 | ) | 1.36 | 0.06 | |||||||||||||||||||||
| Basic net income (loss) per share | $ | 1.29 | $ | (0.04 | ) | $ | 1.25 | $ | 0.01 | |||||||||||||||||
| Diluted loss per share from continuing operations | $ | (0.07 | ) | $ | (0.03 | ) | $ | (0.11 | ) | $ | (0.05 | ) | ||||||||||||||
| Diluted income (loss) per share from discontinued operations | 1.36 | (0.01 | ) | 1.36 | 0.06 | |||||||||||||||||||||
| Diluted net income (loss) per share | $ | 1.29 | $ | (0.04 | ) | $ | 1.25 | $ | 0.01 | |||||||||||||||||
| Schedule 3 | |||||||||||||
| BIOSCRIP, INC | |||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| (unaudited and in thousands) | |||||||||||||
| Six Months Ended | |||||||||||||
| June 30, | |||||||||||||
| 2012 | 2011 | ||||||||||||
| Cash flows from operating activities: | |||||||||||||
| Net income | $ | 69,063 | $ | 615 | |||||||||
| Less: income from discontinued operations, net of income taxes | 75,379 | 3,270 | |||||||||||
| Loss from continuing operations, net of income taxes | (6,316 | ) | (2,655 | ) | |||||||||
| Adjustments to reconcile loss from continuing operations, net of income taxes to | |||||||||||||
| net cash provided by operating activities: | |||||||||||||
| Depreciation | 3,981 | 2,980 | |||||||||||
| Amortization of intangibles | 1,757 | 1,638 | |||||||||||
| Amortization of deferred financing costs | 576 | 503 | |||||||||||
| Change in deferred income tax | 1,404 | (167 | ) | ||||||||||
| Compensation under stock-based compensation plans | 2,711 | 2,252 | |||||||||||
| Loss on disposal of fixed assets | 45 | 64 | |||||||||||
| Changes in assets and liabilities: | |||||||||||||
| Receivables, net of bad debt expense | 78,925 | (7,905 | ) | ||||||||||
| Inventory | (3,104 | ) | 2,337 | ||||||||||
| Prepaid expenses and other assets | 4,769 | (63 | ) | ||||||||||
| Accounts payable | (50,313 | ) | (803 | ) | |||||||||
| Claims payable | (860 | ) | 2,161 | ||||||||||
| Amounts due to plan sponsors | 462 | 4,062 | |||||||||||
| Accrued expenses and other liabilities | 8,797 | 5,144 | |||||||||||
| Net cash provided by operating activities from continuing operations | 42,834 | 9,548 | |||||||||||
| Net cash (used in) provided by operating activities from discontinued operations | (21,195 | ) | 28,950 | ||||||||||
| Net cash provided by operating activities | 21,639 | 38,498 | |||||||||||
| Cash flows from investing activities: | |||||||||||||
| Purchases of property and equipment, net | (3,682 | ) | (4,422 | ) | |||||||||
| Cash consideration paid for acquisitions, net of cash acquired | (466 | ) | - | ||||||||||
| Cash consideration paid to DS Pharmacy | (2,935 | ) | - | ||||||||||
| Cash consideration paid for unconsolidated affiliate, net of cash acquired | (7,100 | ) | - | ||||||||||
| Net cash used in investing activities from continuing operations | (14,183 | ) | (4,422 | ) | |||||||||
| Net cash provided by (used in) investing activities from discontinued operations | 161,499 | (1,447 | ) | ||||||||||
| Net cash provided by (used in) investing activities | 147,316 | (5,869 | ) | ||||||||||
| Cash flows from financing activities: | |||||||||||||
| Borrowings on line of credit | 848,633 | 841,200 | |||||||||||
| Repayments on line of credit | (882,455 | ) | (874,301 | ) | |||||||||
| Repayments of capital leases | (2,211 | ) | (59 | ) | |||||||||
| Deferred and other financing costs | - | (22 | ) | ||||||||||
| Net proceeds from exercise of employee stock compensation plans | 5,675 | 691 | |||||||||||
| Surrender of stock to satisfy minimum tax withholding | (174 | ) | (138 | ) | |||||||||
| Net cash used in financing activities | (30,532 | ) | (32,629 | ) | |||||||||
| Net change in cash and cash equivalents | 138,423 | - | |||||||||||
| Cash and cash equivalents - beginning of period | - | - | |||||||||||
| Cash and cash equivalents - end of period | $ | 138,423 | $ | - | |||||||||
| DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||||
| Cash paid during the period for interest | $ | 13,641 | $ | 14,020 | |||||||||
| Cash paid during the period for income taxes | $ | 313 | $ | 682 | |||||||||
| DISCLOSURE OF NON-CASH TRANSACTIONS: | |||||||||||||
| Capital lease obligations incurred to acquire property and equipment | $ | 20 | $ | - | |||||||||
| Schedule 4 | |||||||||||||||||||||||||
| BIOSCRIP, INC | |||||||||||||||||||||||||
| Reconciliation between GAAP and Non-GAAP Measures | |||||||||||||||||||||||||
| (unaudited and in thousands) | |||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||||
| Results of Operations: | |||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||
| Infusion Services - product revenue | $ | 108,557 | $ | 87,717 | $ | 215,360 | $ | 177,499 | |||||||||||||||||
| Infusion Services - service revenue | 2,416 | 2,136 | 4,667 | 4,079 | |||||||||||||||||||||
| Total Infusion Services revenue | 110,973 | 89,853 | 220,027 | 181,578 | |||||||||||||||||||||
| Home Health Services - service revenue | 16,860 | 17,673 | 33,571 | 34,881 | |||||||||||||||||||||
| PBM Services - service revenue | 28,068 | 24,049 | 57,936 | 45,953 | |||||||||||||||||||||
| Total revenue | $ | 155,901 | $ | 131,575 | $ | 311,534 | $ | 262,412 | |||||||||||||||||
| Adjusted EBITDA by Segment before corporate overhead: | |||||||||||||||||||||||||
| Infusion Services | $ | 8,026 | $ | 8,340 | $ | 15,809 | $ | 17,624 | |||||||||||||||||
| Home Health Services | 1,075 | 1,787 | 2,155 | 2,793 | |||||||||||||||||||||
| PBM Services | 6,364 | 6,764 | 12,462 | 12,887 | |||||||||||||||||||||
| Total Segment Adjusted EBITDA | 15,465 | 16,891 | 30,426 | 33,304 | |||||||||||||||||||||
| Corporate overhead | (6,458 | ) | (5,362 | ) | (13,040 | ) | (12,012 | ) | |||||||||||||||||
| Consolidated Adjusted EBITDA | 9,007 | 11,529 | 17,386 | 21,292 | |||||||||||||||||||||
| Interest expense, net | (6,790 | ) | (6,235 | ) | (13,359 | ) | (12,847 | ) | |||||||||||||||||
| Income tax (expense) benefit | (364 | ) | 127 | 138 | 544 | ||||||||||||||||||||
| Depreciation | (2,050 | ) | (1,647 | ) | (3,981 | ) | (2,980 | ) | |||||||||||||||||
| Amortization of intangibles | (878 | ) | (819 | ) | (1,757 | ) | (1,638 | ) | |||||||||||||||||
| Stock-based compensation expense | (1,745 | ) | (1,120 | ) | (2,711 | ) | (2,252 | ) | |||||||||||||||||
| Acquisition, integration, severance and other employee costs | (1,271 | ) | - | (1,530 | ) | - | |||||||||||||||||||
| Restructuring expense | (202 | ) | (3,475 | ) | (502 | ) | (4,774 | ) | |||||||||||||||||
| Loss from continuing operations, net of income taxes | $ | (4,293 | ) | $ | (1,640 | ) | $ | (6,316 | ) | $ | (2,655 | ) | |||||||||||||