BioScrip's CEO Discusses Q1 2012 Results - Earnings Call Transcript

BioScrip (BIOS)

Q1 2012 Earnings Call

May 09, 2012 8:30 am ET


Lisa Wilson -

Richard M. Smith - Chief Executive Officer, President, Chief Operating Officer and Director

Hai V. Tran -

Mary Jane Graves - Chief Financial Officer and Treasurer


Brooks G. O'Neil - Dougherty & Company LLC, Research Division

Michael John Petusky - Noble Financial Group, Inc., Research Division

Kyle D. Smith - Jefferies & Company, Inc., Research Division



Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the BioScrip First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Wednesday, May 9, 2012.

I would now like to turn the conference over to Lisa Wilson, Investor Relations for BioScrip.

Lisa Wilson

Good morning, and thank you for joining us today. By now you should have received a copy of our press release issued this morning. If you have not received it, you may access it through the Investor Relations section at our website.

Rick Smith, President and Chief Executive Officer and MJ Graves, Interim Chief Financial Officer and Treasurer, will host this morning's call. The call may be accessed through our website at A replay will be available shortly after the call. Interested parties can access the replay by dialing (800) 633-8284 in the U.S. and (402) 977-9140 internationally and entering access code 21590255. An audio webcast will also be available under the Investor Relations section of the BioScrip website at

Before we get started, I would like to remind everyone that any statements made on the call today or in our press release that express a belief, expectation or intent, as well as those that are historical facts are considered forward-looking statements and are protected under the Safe Harbor of the Private Securities Litigation and Reform Act. These forward-looking statements are based on information available to BioScrip today, and the company assumes no obligation to update statements as circumstances change. These forward-looking statements may involve a number of risks and uncertainties, which may cause the company's results to differ materially from such statements. Important factors that could cause such differences include the failure to realize annualized cost savings associated with any restructuring or cost reduction efforts, the ability of members of management to execute these efforts, the company's ability to leverage core competencies or maximize margin and operating cash flow and the company's ability to grow its Infusion segment organically or through acquisitions, as well as the risks described in the company's periodic filings with the Securities and Exchange Commission including BioScrip's annual report on Form 10-K for the year ended December 31, 2011.

During this presentation, we will refer to non-GAAP financial measures. A reconciliation of such measures to the most comparable GAAP financial measure is contained in our press release issued earlier today, which can again be obtained from our website at And now I would like to turn the call over to Rick Smith. Rick?

Richard M. Smith

Thank you, Lisa. Good morning, everyone. Thank you for joining today's call. In the first quarter, we continued to move forward as a more focused and growing Infusion company. The benefits of the contributing Home Health, Cash Card and PBM businesses. We delivered solid revenue growth in our Infusion business and created significant momentum in our targeted therapies.

For the first quarter, total company revenue increased 19% year-over-year, $155.6 million. Driving this was Infusion revenue, which was extremely strong at $109.1 million, up 18.9%. Our other businesses performed in line with expectations with Home Health down slightly and PBM on target. Gross profit for the quarter was $53.5 million or 34.4% of revenue compared to $51.4 million or 39.2% in the prior year.

MJ will discuss the financial details shortly. Before we get into our discussion of the results, I want to give a status update of where we stand in executing our plan. In short, I'm very encouraged by what our team is delivering. In early 2011, we outlined our strategic assessment which pinpointed exactly what needed to be addressed at BioScrip and how we would position the company for the future growth and profitability. I'm pleased to report that a little over 1 year later, we remain on track with our plan. We continue to execute by focusing on the market segments in which we have meaningful strength and distinct competitive advantages. There's a real energy here and we are all driving towards the same goal, serving our customers, facilitating growth and improving margins and profitability.

Last quarter, we provided an update that included a targeted annualized revenue of $600 million to $620 million and annualized adjusted EBITDA of $62 million to $65 million for the fourth quarter of 2012. I also stated last quarter that there would be certain short-term factors and additional costs that will be incurred and also eliminated during the second and third quarters of 2012 that would impact our results until we arrive at a clean run rate in Q4. We remain on track to achieve these results for the fourth quarter of this year.

Earlier this week, we announced that we closed the sale of certain assets to Walgreens. This was the cornerstone of our strategic initiative to reposition the company to focus on the Infusion and Home Health segment. Pharmacy businesses that were transferred to Walgreens represented over 15 years of payor and customer relationships that overlap both Infusion, especially Pharmacy Services.

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