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Securities
and Exchange Commission
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Washington,
D.C. 20549
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R
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QUARTERLY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the quarterly period ended March 31, 2009
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OR
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£
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the transition period from
________ to _______
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Delaware
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05-0489664
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(State
or Other Jurisdiction
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(I.R.S.
Employer Identification No.)
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of
Incorporation or Organization)
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100
Clearbrook Road, Elmsford, NY
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10523
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Large
accelerated filer: £
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Accelerated
filer: R
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Non-accelerated
filer: £
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Smaller
reporting company: £
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(Do
not check if a smaller reporting
company)
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Page
Number
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PART I | FINANCIAL INFORMATION |
3
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3
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3
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4
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5
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6
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12
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17
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17
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18
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18
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18
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18
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19
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EXHIBITS
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EX.31-1: CERTIFICATION | |||
EX.31-2: CERTIFICATION | |||
EX.32-1: CERTIFICATION | |||
EX.32-2: CERTIFICATION |
March
31,
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December
31,
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|||||||
2009
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2008
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|||||||
ASSETS
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(unaudited)
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|||||||
Current
assets
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||||||||
Cash
and cash equivalents
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$ | - | $ | - | ||||
Receivables,
less allowance for doubtful accounts of $9,866 and $11,629
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||||||||
at
March 31, 2009 and December 31, 2008, respectively
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144,612 | 158,649 | ||||||
Inventory
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39,040 | 45,227 | ||||||
Prepaid
expenses and other current assets
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3,210 | 2,766 | ||||||
Total
current assets
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186,862 | 206,642 | ||||||
Property
and equipment, net
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14,714 | 14,748 | ||||||
Other
assets
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1,103 | 1,069 | ||||||
Goodwill
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24,498 | 24,498 | ||||||
Total
assets
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$ | 227,177 | $ | 246,957 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||||||
Current
liabilities
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||||||||
Line
of credit
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$ | 36,114 | $ | 50,411 | ||||
Accounts
payable
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67,341 | 76,936 | ||||||
Claims
payable
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4,891 | 5,230 | ||||||
Amounts
due to plan sponsors
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5,699 | 5,646 | ||||||
Accrued
expenses and other current liabilities
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9,607 | 9,575 | ||||||
Total
current liabilities
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123,652 | 147,798 | ||||||
Deferred
taxes
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730 | 533 | ||||||
Income
taxes payable
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3,229 | 3,089 | ||||||
Total
liabilities
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127,611 | 151,420 | ||||||
Stockholders'
equity
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||||||||
Preferred
stock, $.0001 par value; 5,000,000 shares authorized;
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||||||||
no
shares issued or outstanding
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- | - | ||||||
Common
stock, $.0001 par value; 75,000,000 shares authorized; shares
issued:
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||||||||
41,763,194,
and 41,622,629, respectively; shares outstanding; 38,718,278
and
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||||||||
38,691,356,
respectively
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4 | 4 | ||||||
Treasury
stock, shares at cost: 2,642,260 and 2,624,186,
respectively
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(10,320 | ) | (10,288 | ) | ||||
Additional
paid-in capital
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249,217 | 248,441 | ||||||
Accumulated
deficit
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(139,335 | ) | (142,620 | ) | ||||
Total
stockholders' equity
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99,566 | 95,537 | ||||||
Total
liabilities and stockholders' equity
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$ | 227,177 | $ | 246,957 |
Three
Months Ended
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||||||||
March
31,
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||||||||
2009
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2008
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|||||||
Revenue
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$ | 325,749 | $ | 327,471 | ||||
Cost
of revenue
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289,759 | 295,099 | ||||||
Gross
profit
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35,990 | 32,372 | ||||||
Selling,
general and administrative expenses
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30,327 | 31,537 | ||||||
Bad
debt expense
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1,380 | 650 | ||||||
Income
from operations
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4,283 | 185 | ||||||
Interest
expense, net
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(594 | ) | (585 | ) | ||||
Income
before income taxes
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3,689 | (400 | ) | |||||
Tax
provision
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404 | 77 | ||||||
Net
income (loss)
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$ | 3,285 | $ | (477 | ) | |||
Income
(loss) per common share
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||||||||
Basic
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$ | 0.08 | $ | (0.01 | ) | |||
Diluted
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$ | 0.08 | $ | (0.01 | ) | |||
Weighted
average common shares outstanding
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||||||||
Basic
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38,709 | 38,177 | ||||||
Diluted
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38,787 | 38,177 |
Three
Months Ended
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||||||||
March
31,
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||||||||
2009
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2008
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|||||||
Cash
flows from operating activities:
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||||||||
Net
income (loss)
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$ | 3,285 | $ | (477 | ) | |||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities
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||||||||
Depreciation
and amortization
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1,111 | 1,552 | ||||||
Change
in deferred income tax
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197 | - | ||||||
Compensation
under stock-based compensation plans
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776 | 957 | ||||||
Bad
debt expense
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1,380 | 650 | ||||||
Changes
in assets and liabilities
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||||||||
Receivables,
net
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12,657 | (16,205 | ) | |||||
Inventory
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6,187 | (917 | ) | |||||
Prepaid
expenses and other assets
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(478 | ) | (1,469 | ) | ||||
Accounts
payable
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(9,595 | ) | 5,694 | |||||
Claims
payable
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(339 | ) | 1,123 | |||||
Amounts
due to plan sponsors
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53 | 525 | ||||||
Accrued
expenses and other liabilities
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173 | (3,901 | ) | |||||
Net
cash provided by (used in) operating activities
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15,407 | (12,468 | ) | |||||
Cash
flows from investing activities:
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||||||||
Purchases
of property and equipment, net of disposals
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(1,077 | ) | (2,175 | ) | ||||
Net
cash used in investing activities
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(1,077 | ) | (2,175 | ) | ||||
Cash
flows from financing activities:
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||||||||
Borrowings
on line of credit
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329,480 | 338,236 | ||||||
Repayments
on line of credit
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(343,777 | ) | (323,505 | ) | ||||
Surrender
of stock to satisfy minimum tax withholding
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(33 | ) | (235 | ) | ||||
Net
proceeds from exercise of employee stock compensation
plans
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- | 147 | ||||||
Net
cash (used in) provided by financing activities
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(14,330 | ) | 14,643 | |||||
Net
change in cash and cash equivalents
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- | - | ||||||
Cash
and cash equivalents - beginning of period
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- | - | ||||||
Cash
and cash equivalents - end of period
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$ | - | $ | - | ||||
DISCLOSURE
OF CASH FLOW INFORMATION:
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||||||||
Cash
paid during the period for interest
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$ | 593 | $ | 847 | ||||
Cash
paid during the period for income taxes
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$ | 205 | $ | 183 |
Three
Months Ended
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||||||||
March
31,
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||||||||
2009
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2008
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|||||||
Numerator:
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||||||||
Net
income (loss)
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$ | 3,285 | $ | (477 | ) | |||
Denominator
- Basic:
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||||||||
Weighted
average number of common shares outstanding
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38,709 | 38,177 | ||||||
Basic
income (loss) per common share
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$ | 0.08 | $ | (0.01 | ) | |||
Denominator
- Diluted:
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||||||||
Weighted
average number of common shares outstanding
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38,709 | 38,177 | ||||||
Common
share equivalents of outstanding stock options and restricted
awards
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78 | - | ||||||
Total
diluted shares outstanding
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38,787 | 38,177 | ||||||
Diluted
income (loss) per common share
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$ | 0.08 | $ | (0.01 | ) |
Three
Months Ended
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||||||||
March
31,
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||||||||
2009
|
2008
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|||||||
Expected
volatility
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65.1 | % | 52.0 | % | ||||
Risk-free
interest rate
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2.67 | % | 3.90 | % | ||||
Expected
life of options
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5.6
years
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6.2
years
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||||||
Dividend
rate
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- | - | ||||||
Fair
value of options
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$ | 1.17 | $ | 4.16 |
Three
Months Ended
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||||||||
March
31,
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||||||||
2009
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2008
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Results
of Operations:
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||||||||
Revenue:
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||||||||
Specialty
Services
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$ | 274,323 | $ | 277,308 | ||||
PBM
Services
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51,426 | 50,163 | ||||||
Total
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$ | 325,749 | $ | 327,471 | ||||
Income
(loss) from operations:
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||||||||
Specialty
Services
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$ | 1,638 | $ | (1,753 | ) | |||
PBM
Services
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2,645 | 1,938 | ||||||
Total
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4,283 | 185 | ||||||
Interest
expense
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594 | 585 | ||||||
Income
tax expense
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404 | 77 | ||||||
Net
income (loss):
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$ | 3,285 | $ | (477 | ) | |||
Capital
expenditures:
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||||||||
Specialty
Services
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$ | 943 | $ | 1,784 | ||||
PBM
Services
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134 | 391 | ||||||
Total
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$ | 1,077 | $ | 2,175 | ||||
Depreciation
Expense:
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||||||||
Specialty
Services
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$ | 929 | $ | 947 | ||||
PBM
Services
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182 | 121 | ||||||
Total
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$ | 1,111 | $ | 1,068 | ||||
Total
Assets
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||||||||
Specialty
Services
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$ | 163,455 | $ | 249,869 | ||||
PBM
Services
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63,722 | 65,232 | ||||||
Total
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$ | 227,177 | $ | 315,101 |
Three
Months Ended
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||||||||
March
31,
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||||||||
2009
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2008
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|||||||
PBM
Services Revenue from Plan Sponsor
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$ | 30,949 | $ | 29,349 | ||||
Specialty
Services Revenue from Plan Sponsor
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13,564 | 15,794 | ||||||
Total
Services Revenue from Plan Sponsor
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$ | 44,513 | $ | 45,143 | ||||
Percentage
of Total Revenue
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14 | % | 14 | % |
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·
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Statements
relating to our business development
activities;
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·
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Sales
and marketing efforts;
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·
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Status
of material contractual arrangements, including the negotiation or
re-negotiation of such
arrangements;
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·
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Future
capital expenditures;
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·
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Effects
of regulation and competition in our business;
and
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·
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Future
operation performance.
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·
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Risks
associated with increased government regulation related to the health care
and insurance industries in general, and more specifically, pharmacy
benefit management and specialty pharmaceutical distribution
organizations;
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·
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Unfavorable
economic and market conditions;
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·
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Reductions
in Federal and state reimbursement;
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·
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Existence
of complex laws and regulations relating to our
business;
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·
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Achieving
financial covenants under the “Facility” (defined
below);
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·
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Availability
of financing sources;
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·
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Declines
and other changes in revenue due to expiration of short-term
contracts;
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·
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Network
lock-outs and decisions to in-source by health
insurers;
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·
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Unforeseen
problems arising from contract
terminations;
|
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·
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Increases
or other changes in the Company’s acquisition cost for its products;
and
|
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·
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Changes
in industry pricing benchmarks such as average wholesale price (“AWP”),
wholesale acquisition cost (“WAC”) and average manufacturer price
(“AMP”).
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Three
Months Ended
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||||||||||||
March
31,
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||||||||||||
2009
|
2008
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|||||||||||
Revenue
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$ | 325,749 | 100.0 | % | $ | 327,471 | 100.0 | % | ||||
Gross
profit
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$ | 35,990 | 11.0 | % | $ | 32,372 | 9.9 | % | ||||
Income
from operations
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$ | 4,283 | 1.3 | % | $ | 185 | 0.1 | % | ||||
Interest
expense, net
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$ | (594 | ) | -0.2 | % | $ | (585 | ) | -0.2 | % | ||
Income
before income taxes
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$ | 3,689 | 1.1 | % | $ | (400 | ) | -0.1 | % | |||
Net
income (loss)
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$ | 3,285 | 1.0 | % | $ | (477 | ) | -0.1 | % |
(a)
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On
April 28, 2009 we held our Annual Meeting of Stockholders (the “Annual
Meeting”).
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(b)
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At
the Annual Meeting, our stockholders elected Charlotte W. Collins, Louis
T. DiFazio, Richard H. Friedman, Myron Z. Holubiak, David R. Hubers,
Richard L. Robbins, Stuart A. Samuels and Steven K. Schelhammer as
directors to serve until our next annual meeting of
stockholders.
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(c)
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At
the Annual Meeting our stockholders also approved the appointment of Ernst
& Young LLP as our independent auditors for the year ending December
31, 2009.
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(d)
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Set
forth below are the final results of the voting at the annual
meeting:
|
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(i)
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Election
of Directors:
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For
|
Withheld
|
||
Charlotte
W. Collins
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17,798,458
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10,114,393
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Louis
T. DiFazio
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25,951,079
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1,961,772
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Richard
H. Friedman
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25,662,385
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2,250,466
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Myron
Z. Holubiak
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18,073,682
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9,839,169
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David
R. Hubers
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26,002,132
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1,910,719
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Richard
L. Robbins
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26,004,665
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1,908,186
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Stuart
A. Samuels
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18,041,572
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9,871,279
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Steven
K. Schelhammer
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18,125,896
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9,786,955
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(ii)
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Adoption
Ratification of the appointment of Ernst & Young LLP as our
independent auditors for the year ending December 31,
2009:
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For
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Against
|
Abstain
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Broker
Non-Votes
|
|||
27,506,533
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402,965
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3,353
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0
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Exhibit
3.1
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Second
Amended and Restated Certificate of Incorporation of BioScrip, Inc.
(Incorporated by reference to Exhibit 3.2 to the Company’s Registration
Statement on Form S-4 (File No. 333-119098), as amended, which became
effective on January 26, 2005)
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Exhibit
3.2
|
Amended
and Restated By-Laws of BioScrip, Inc. (Incorporated by reference to
Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC
on May 16, 2007, accession No. 0000950123-07-007569)
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Exhibit
31.1
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Certification
of Richard H. Friedman pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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Exhibit
31.2
|
Certification
of Stanley G. Rosenbaum pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Exhibit
32.1
|
Certification
of Richard H. Friedman pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Exhibit
32.2
|
Certification
of Stanley G. Rosenbaum pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
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BIOSCRIP,
INC.
|
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Date:
May 5, 2009
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/s/ Stanley G. Rosenbaum
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Stanley
G. Rosenbaum, Chief Financial Officer,
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Treasurer
and Principal Accounting Officer
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