BioScrip Provides Business Update and Outlines Plan to Increase Liquidity
15 December 2016 - 2:00AM
BioScrip, Inc. (NASDAQ:BIOS) ("BioScrip" or the "Company"), a
leading national provider of infusion and home care management
solutions, today announced that it has introduced a proposed
Amendment to its Credit Agreement (the “Amendment”) intended to
amend the original Credit Agreement, dated July 31, 2013, among
BioScrip, the guarantors, SunTrust Bank as administrative agent,
and a syndicate of lenders.
The proposed Amendment would reduce the restrictive debt
leverage covenant in the Credit Agreement for the next seven
quarters, which is anticipated to allow the Company to be
prospectively compliant for the next year and half. The proposed
Amendment restructures the existing revolving credit facility,
providing BioScrip with immediate access to $15 million in
incremental liquidity. Under the proposed terms of the Amendment,
the loan maturity of July 31, 2018 would remain unchanged.
Preliminary performance in the fourth quarter of 2016 is
trending better than expected, with both core revenue and adjusted
EBITDA accelerating as the quarter progresses. Accordingly, fourth
quarter 2016 revenue and adjusted EBITDA are expected to be at the
high end of the previously announced ranges of $232 million to $239
million, and $6 million to $8 million, respectively.
Additionally, completion of all necessary actions to realize
$17 million of Home Solutions synergies are expected to be in place
by the end of 2016. BioScrip also remains on pace to realize an
additional $8 million to $10 million in further cost structure
improvements in 2017.
“As stated on our third quarter earnings conference call,
BioScrip is in the beginning stages of implementing an 18 to 24
month turnaround strategy and is focused on optimizing operational
efficiencies to drive profitable growth and deliver on our
financial commitments,” said Dan Greenleaf, President and Chief
Executive Officer of BioScrip. “While we are only partially through
the fourth quarter of 2016, I am extremely pleased with the
operating performance quarter to date and expect to report fourth
quarter 2016 revenue and adjusted EBITDA results at the high end of
our previously announced guidance ranges. Better than expected
revenue growth in our core business combined with cost containment
initiatives and synergies are the primary drivers behind our
updated outlook for 2016. Entering into this amendment to our
credit agreement provides us with the necessary near-term liquidity
and working capital to continue to execute this turnaround strategy
over the next several quarters.”
In light of the recent Congressional approval of the 21st
Century Cures Act, the Company is also issuing a statement on the
potential impact to BioScrip’s business. This legislation will
potentially result in a significant reduction in Medicare patient
access to inotropic and subcutaneous Ig therapies effective January
1, 2017. The company estimates that the Cures Act as written will
result in reimbursement reductions impacting therapies representing
approximately 3%-4% of total current revenue.
“We are actively analyzing the implications of the Cures Act and
looking to undertake potential operational and strategic
initiatives to mitigate the impact on our business,” said Mr.
Greenleaf. “While we are disappointed with the passage of the Act
and the potential implications for our Medicare patients, we are
confident in our business model and in the ability of our team to
reach a level of financial productivity that is more reflective of
the true value of the company. As always, our priority is to
provide high quality care to our patients while creating long-term
value for our shareholders.”
About BioScrip
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,” that involve substantial risks and
uncertainties. 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 integrate the acquisition of Home
Solutions, the Company's ability to grow its core Infusion
revenues, the Company's ability to continue to experience positive
results from its financial improvement plan to reduce operating
costs; the Company’s ability to consummate the Amendment and to
comply with the covenants in its debt agreements; the success of
the Company’s initiatives to mitigate the impact of the Cures Act
on its business; 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.
Note Regarding Use of Non-GAAP Financial
Measures
This press release includes projected adjusted EBITDA, which is
a non-GAAP financial measure. Adjusted EBITDA is not a measurement
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 the Company’s
liquidity. In addition, the Company's definition of adjusted EBITDA
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,
income tax expense, depreciation and amortization, impairment of
goodwill, stock-based compensation expense, and restructuring,
integration and other 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 that adjusted EBITDA provides
useful supplemental information regarding the performance of
BioScrip’s business operations and facilitates comparisons to the
Company’s historical operating results. The Company is not able to
provide a reconciliation of projected adjusted EBITDA to expected
results due to the unknown effect, timing and potential
significance of gains or losses on disposition and restructuring,
acquisition, integration and other similar expenses.
For Further Information:
Investor Contacts
Jeffrey M. Kreger
Chief Financial Officer
(720) 697-5200
jeffrey.kreger@bioscrip.com
David Clair
ICR, Inc.
(646) 277-1266
david.clair@icrinc.com
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