) recently declared its third-quarter 2013 results. Adjusting for
certain one-time expenses BioScrip reported earnings were 1 cents
in the quarter, declining from the year-ago earnings figure of 2
cents. The results were in line with the Zacks Consensus Estimate
of 1 cent.
Following the announcement on Nov 6, stock price of BioScrip
declined 15.8% to $6.05 per share on Nov 11.
On a reported basis, BioScrip's net loss was $34.1 million or 53
cents per share considerably exceeded the net loss of $11.5
million or 20 cents per share incurred in the year-ago quarter.
Revenues in Detail
Total revenues rose 22.6% year over year to $208.8 million,
beating the Zacks Consensus Estimate of $205 million. The company
operates through three main segments, viz. Infusion Services (83%
of total revenues), Home Health Services (8.6%) and PBM Services
Segments in Detail
The company reported revenues of $174.8 million in Infusion
Services, recording impressive growth of 38.8% year over year.
Organic growth and acquisitions were the major revenue drivers in
Revenues in the Home Health Services segment increased 4.46% to
$18.1 million. The rise came on the back of volume improvement
from private duty nursing activity, partially offset by a
reduction in reimbursement rates.
Revenues in the PBM Services segment were $16 million, down 41%
from the prior-year quarter. The decline was due to lower sales
volume of discount cards and termination of a contract with a PBM
While the cost of product revenues shot up 34.9% to $115.5
million, the cost of service revenues declined 7.9% to $24.6
million in the quarter.
Gross profit during the quarter increased 18.4% year over year to
$68.6 million on account of greater volume of business generated
from Infusion Services. However, gross margin contracted 110
basis points (bps) to 32.9% owing to business mix. The downfall
resulted from the Infusion Services segment growing more rapidly
than the higher-margin PBM Services segment.
Selling, general and administrative (SG&A) expenses increased
24% to $57.9 million. The hike in expenditure resulted in a drag
of 135 bps in adjusted operating margin, which settled at 3.2%
for the reported quarter.
The company ended the quarter as on Sep 30, 2013, with no cash
balance as all its cash had been utilized. The long-term debt was
$415.5 million as on Sep30, 2013 as compared to $226.4 million on
For 2013, BioScrip continues to expect revenues of $830-$850
Despite the core business of the company generating positive
growth, it delivered a satisfactory quarter, as revenues could
not surpass the estimates.
BioScrip is focusing on the implementation of a company-wide
profit improvement plan to deliver robust operating performance
in the future. Such an initiative will help it to generate
greater savings through acquisition-related synergies, improved
operating efficiencies and reductions in SG&A expenses. We
are also optimistic about the recent acquisitions being accretive
for the company's business in the long run.
Currently, the stock carries a Zacks Rank #3 (Hold). Other stocks
that are worth a look include
Rite Aid Corporation
) sporting a Zacks Rank #1 (Strong Buy), and
CVS Caremark Corporation
GNC Holdings Inc.
), each carrying a Zacks Rank #2 (Buy).
BIOSCRIP INC (BIOS): Free Stock Analysis
CVS CAREMARK CP (CVS): Free Stock Analysis
GNC HOLDINGS (GNC): Free Stock Analysis
RITE AID CORP (RAD): Free Stock Analysis
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