BioScrip, Inc. (Nasdaq: BIOS) today announced a first quarter net loss of $7.2 million, or $0.18 per share on revenues of $335.1 million. These results compare to net income of $3.3 million, or $0.08 per share, on revenues of $325.7 million for the first quarter of 2009. The net loss includes one-time transaction expenses of $7.3 million ($5.5 million, net of taxes) related to the acquisition of Critical Homecare Solutions ("CHS") and additional bad debt expense in connection with the Competitive Acquisition Program ("CAP"), which was terminated in 2008, of $1.5 million ($1.1 million, net of taxes). First quarter 2010 Adjusted EBITDA was $2.7 million compared to $6.2 million for the same period a year ago.
"We successfully closed the acquisition of CHS on March 25, 2010 and are pleased with the progress we have made to integrate them into our operations. We are on target to achieve our planned cost synergies and have identified additional cost of goods savings. Furthermore, we are seeing tangible results from our cross-selling efforts and continue to believe that the combined platform positions BioScrip to be a leading national, specialty pharmacy provider," stated Richard H. Friedman, BioScrip's Chairman and Chief Executive Officer. "While our first quarter results were impacted by several seasonal and timing-related items, including the delayed implementation of new business from January to March, and the acceleration of certain operating expenses in the quarter, we ended March at our expected revenue levels and have similar momentum going into the second quarter."
Results of Operations
Revenue for the first quarter of 2010 totaled $335.1 million compared to $325.7 million for the same period a year ago, an increase of 2.9%. Excluding the impact of the terminated United Health Group ("UHG") organ transplant and HIV/AIDS programs, first quarter 2010 revenues grew 8.6% over the comparable period in 2009. The increase was due primarily to increased specialty pharmacy revenues and includes approximately $5 million of revenues from CHS representing four billing days in the quarter. Specialty revenues increased by approximately $23.0 million, or 22%, in March 2010 compared to the prior two months average. This increase is a result of new business and a return to normalized utilization levels resulting from post year-end seasonality.
Gross profit for the first quarter of 2010 was $38.9 million compared to $36.0 million for the first quarter of 2009. Gross margin for the first quarter 2010 was 11.6%, compared to 11.0% for the same period of 2009. The increase was a result of the inclusion of CHS and new business, which more than offset the unfavorable impact of the competitive market conditions in the traditional pharmacy services and the previously disclosed AWP class action litigation settlement.
The first quarter 2010 operating loss was $6.3 million compared to an operating profit of $4.3 million for the first quarter of 2009. The operating loss in the first quarter of 2010 includes $5.0 million of CHS transaction expenses and a $1.5 million charge related to CAP. Reported expenses include $1.2 million of accelerated employee benefits, increased temporary staffing and other non-recurring expenses.
Interest expense in the first quarter of 2010 was $3.2 million, which includes a $2.3 million fee from the financing of the CHS acquisition and $0.5 million interest expense related to the Company's new capital structure. This compares to $0.6 million in the same period of 2009.
Liquidity
As of March 31, 2010, the Company had $37.2 million of cash and cash equivalents. In addition, the revolving credit facility remains undrawn.
Financial Guidance
The Company reaffirms full-year 2010 guidance of approximately $1.67 to $1.73 billion in revenue and adjusted EBITDA of $67.0 to $71.0 million.
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