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BioScrip Inc. Reports Operating Results (10-Q)

August 03, 2010 | About:
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10qk

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BioScrip Inc. (BIOS) filed Quarterly Report for the period ended 2010-06-30.

Bioscrip Inc. has a market cap of $230.4 million; its shares were traded at around $4.3 with a P/E ratio of 18.7 and P/S ratio of 0.2. BIOS is in the portfolios of Jeff Auxier of Auxier Focus Fund, Paul Tudor Jones of The Tudor Group, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

Revenue. Revenue for the second quarter of 2010 was $412.0 million as compared to revenue of $328.7 million in the second quarter of 2009. Pharmacy Services revenue for the second quarter of 2010 was $305.4 million as compared to revenue of $292.3 million for the same period a year ago, an increase of $13.1 million, or 4.5%. That increase is primarily due to revenues on new contracts and expansion of the number of patients served on existing contracts as well as drug inflation. Infusion/Home Health Services revenue for the second quarter of 2010 was $106.7 million, as compared to revenue of $36.4 million in the second quarter of 2009, an increase of $70.3 million, or 193.1%. Excluding revenues associated with the acquired CHS businesses, our infusion revenues increased $5.5 million, or 15.1%, from a year ago. CHS revenues contributed $64.8 million of revenue during the quarter.

Revenue for the six months ended June 30, 2010 was $747.1 million as compared to revenue of $654.5 million for the six month ended June 30, 2009. Pharmacy Services revenue for the six months ended June 30, 2010 was $594.3 million as compared to revenue of $583.7 million for the same period a year ago, an increase of $10.6 million, or 1.8%. That increase is primarily due to revenues on new contracts and expansion of the number of patients served on existing contracts as well as drug inflation. Infusion/Home Health Services revenue for the six months ended June 30, 2010 was $152.8 million, as compared to revenue of $70.8 million for the same period a year ago, an increase of $82.0 million, or 115.8%. CHS revenues contributed $69.8 million of revenue for the six months ended June 30, 2010. Excluding revenues associated with the acquired CHS businesses, our infusion revenues increased $12.2 million, or 17.2%, over the prior period. The growth in revenues excluding the acquired businesses in Infusion/Home Health Services for the six months ended June 30, 2010 is a result of new infusion contracts.

Cost of Revenue and Gross Profit. Cost of revenue for the second quarter of 2010 was $338.5 million as compared to $290.4 million for the same period in 2009. Gross profit dollars during the second quarter of 2010 were $73.5 million as compared to $38.4 million for the second quarter of 2009, an increase of $35.1 million. Gross profit as a percentage of revenue increased to 17.8% in the second quarter of 2010 from 11.7% in the second quarter of 2009. The increase in gross profit percentage from 2009 to 2010 is primarily the result of the acquisition of CHS.

SG&A for the six months ended June 30, 2010 were $91.0 million, or 12.2% of total revenue, as compared to $61.9 million, or 9.5% of total revenue, for the same period in 2009. The increase in SG&A is primarily due to $21.6 million additional expense related to CHS, a $4.4 million increase in wages and salaries to strengthen the management and sales team and an increase of $1.9 million in brokers fees related to growth in our prescription discount card business. Due to the acuity level of patients associated with the home health nursing and traditional home infusion services, the Infusion/Home Health Services segment operates at a higher operating expense ratio to revenue than the Pharmacy Services segment.

Bad Debt Expense. For the second quarter of 2010, bad debt expense was $3.6 million, or 0.9% of revenue, as compared to $1.6 million, or 0.5% of revenue, in the second quarter of 2009. Of this $2.0 million increase, $1.3 million is related to the addition of CHS. The remaining $0.7 million increase in bad debt in the second quarter of 2010 relative to 2009 is based on our current collection experience.

For the six months ended June 30, 2010, bad debt expense was $7.2 million, or 1.0% of revenue, as compared to $3.0 million, or 0.5% of revenue, for the same period in 2009. Of this $4.2 million increase, $1.5 million is increased provision related to uncollected receivables remaining under the Centers for Medicare and Medicaid (“CMS”) Competitive Acquisition Program (“CAP”) contract which was terminated effective December 31, 2008. The remaining unreserved net CAP receivable balance at June 30, 2010 is $2.1 million. Although the Federal and state governmental agency process to collect these amounts has become protracted, we are pursuing these monies diligently and believe our reserves are adequate. In addition, another $1.4 million of the bad debt increase is related to the addition of CHS. The remaining $1.3 million increase in bad debt in the first six months of 2010 relative to 2009 is based on our current collection experience.

Read the The complete Report

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