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BioScrip posts 1Q revenue gain, net loss

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ELMSFORD, N.Y. — BioScrip Inc. saw an uptick in revenue for its fiscal 2010 first quarter but recorded a net loss due mainly to costs from its recent acquisition of Critical Homecare Solutions (CHS).

The retail and specialty pharmacy operator said Friday that sales for the quarter ended March 31 totaled $335.1 million, up 2.9% from $325.7 million a year earlier.

Excluding the impact of the terminated United Health Group organ transplant and HIV/AIDS programs, first-quarter 2010 sales grew 8.6%, BioScrip said. The gain stems primarily from increased specialty pharmacy revenue and includes about $5 million in revenue from CHS.

Specialty revenue climbed by 22% in March compared with the prior two months’ average, the company said, adding that the increase reflects new business and a return to normalized utilization levels resulting from post year-end seasonality.

Elmsford, N.Y.-based BioScrip provides retail and specialty pharmacy services along with pharmacy benefit management, infusion and other health care services. It operates a network of 33 retail community pharmacies in 17 states and the District of Columbia.

On the earnings side, the first-quarter net loss was $7.2 million, 18 cents per share, down from net income of $3.3 million, or 8 cents per share, in the prior-year period. BioScrip said the net loss reflects one-time transaction expenses of $7.3 million related to the CHS acquisition, which closed in late March, and bad debt expense of $1.5 million in connection with the Competitive Acquisition Program (CAP), which was terminated in 2008.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) came in at $2.7 million for the 2010 first quarter, down from $6.2 million a year ago. Gross profit for the 2010 first quarter climbed to $38.9 million from $36 million in the prior-year span.

BioScrip recorded an operating loss of $6.3 million in the 2010 first quarter, compared with an operating profit of $4.3 million a year earlier. The loss included $5 million of CHS transaction expenses and a $1.5 million charge related to CAP, the company said.

"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," Richard Friedman, BioScrip chairman and chief executive officer, said in a statement.

"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," Friedman added, "we ended March at our expected revenue levels and have similar momentum going into the second quarter."

BioScrip reaffirmed its full-year 2010 guidance of $1.67 billion to $1.73 billion in revenue and adjusted EBITDA of $67 million to $71 million.


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