|
Securities and Exchange Commission
|
|
Washington, D.C. 20549
|
R
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For the quarterly period ended June 30, 2010
|
|
OR
|
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the transition period from ________ to _______
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Delaware
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05-0489664
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(State or Other Jurisdiction
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(I.R.S. Employer Identification No.)
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of Incorporation or Organization)
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|
100 Clearbrook Road, Elmsford, NY
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10523
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer:
£
|
Accelerated filer:
R
|
Non-accelerated filer:
£
|
Smaller reporting company:
£
|
(Do not check if a smaller reporting company)
|
EXHIBIT 10.1 - SECOND AMENDMENT ABDC PRIME VENDOR AGREEMENT |
EXHIBIT 31.2 - CFO 302 CERTIFICATE |
EXHIBIT 32.1 - CEO 906 CERTIFICATE |
EXHIBIT 32.2 - CFO 906 CERTIFICATE |
June 30,
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December 31,
|
|||||
2010
|
2009
|
|||||
ASSETS
|
(unaudited)
|
|||||
Current assets
|
||||||
Cash and cash equivalents
|
$ | 34,573 | $ | - | ||
Receivables, less allowance for doubtful accounts of $14,305 and $11,504
|
||||||
at June 30, 2010 and December 31, 2009, respectively
|
193,049 | 151,113 | ||||
Inventory
|
54,088 | 51,256 | ||||
Deferred taxes
|
21,705 | 12,913 | ||||
Prepaid expenses and other current assets
|
14,529 | 3,999 | ||||
Total current assets
|
317,944 | 219,281 | ||||
Property and equipment, net
|
22,982 | 15,454 | ||||
Deferred taxes
|
21,354 | 26,793 | ||||
Goodwill
|
319,848 | 24,498 | ||||
Intangible assets, net
|
24,329 | - | ||||
Deferred financing costs
|
6,475 | - | ||||
Other non-current assets
|
5,774 | 1,194 | ||||
Total assets
|
$ | 718,706 | $ | 287,220 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||
Current liabilities
|
||||||
Line of credit
|
$ | - | $ | 30,389 | ||
Current portion of long-term debt
|
3,031 | - | ||||
Accounts payable
|
71,521 | 74,535 | ||||
Notes payable
|
2,250 | - | ||||
Claims payable
|
2,672 | 4,068 | ||||
Amounts due to plan sponsors
|
15,272 | 4,938 | ||||
Deferred revenue
|
3,821 | - | ||||
Accrued expenses and other current liabilities
|
35,352 | 14,273 | ||||
Total current liabilities
|
133,919 | 128,203 | ||||
Long-term debt, net of current portion
|
315,928 | - | ||||
Income taxes payable
|
6,168 | 2,437 | ||||
Other non-current liabilities
|
1,036 | 787 | ||||
Total liabilities
|
457,051 | 131,427 | ||||
Stockholders' equity
|
||||||
Preferred stock, $.0001 par value; 5,000,000 shares authorized;
|
||||||
no shares issued or outstanding
|
- | - | ||||
Common stock, $.0001 par value; 125,000,000 shares authorized; shares issued:
|
||||||
56,297,387 and 42,766,478, respectively; shares outstanding; 53,370,223 and
|
||||||
39,675,865, respectively
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6 | 4 | ||||
Treasury stock, shares at cost: 2,656,499 and 2,647,613, respectively
|
(10,478 | ) | (10,367 | ) | ||
Additional paid-in capital
|
364,689 | 254,677 | ||||
Accumulated deficit
|
(92,562 | ) | (88,521 | ) | ||
Total stockholders' equity
|
261,655 | 155,793 | ||||
Total liabilities and stockholders' equity
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$ | 718,706 | $ | 287,220 |
Three Months Ended
|
Six Months Ended
|
|||||||||||
June 30,
|
June 30,
|
|||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||
Revenue
|
$ | 412,030 | $ | 328,749 | $ | 747,098 | $ | 654,498 | ||||
Cost of revenue
|
338,506 | 290,361 | 634,657 | 580,120 | ||||||||
Gross profit
|
73,524 | 38,388 | 112,441 | 74,378 | ||||||||
Selling, general and administrative expenses
|
54,674 | 31,607 | 91,028 | 61,933 | ||||||||
Bad debt expense
|
3,578 | 1,597 | 7,227 | 2,977 | ||||||||
Acquisition and integration expenses
|
1,059 | - | 6,099 | - | ||||||||
Amortization of intangibles
|
695 | - | 871 | - | ||||||||
Income from operations
|
13,518 | 5,184 | 7,216 | 9,468 | ||||||||
Interest expense, net
|
8,224 | 430 | 11,393 | 1,024 | ||||||||
Income (loss) before income taxes
|
5,294 | 4,754 | (4,177 | ) | 8,444 | |||||||
Tax (benefit) provision
|
2,166 | 377 | (136 | ) | 782 | |||||||
Net income (loss)
|
$ | 3,128 | $ | 4,377 | $ | (4,041 | ) | $ | 7,662 | |||
Income (loss) per common share
|
||||||||||||
Basic
|
$ | 0.06 | $ | 0.11 | $ | (0.09 | ) | $ | 0.20 | |||
Diluted
|
$ | 0.06 | $ | 0.11 | $ | (0.09 | ) | $ | 0.20 | |||
Weighted average common shares outstanding
|
||||||||||||
Basic
|
53,310 | 38,748 | 47,101 | 38,729 | ||||||||
Diluted
|
54,805 | 39,227 | 47,101 | 39,026 |
Six Months Ended
|
||||||
June 30,
|
||||||
2010
|
2009
|
|||||
Cash flows from operating activities:
|
||||||
Net (loss) income
|
$ | (4,041 | ) | $ | 7,662 | |
Adjustments to reconcile net (loss) income to net cash (used in)
|
||||||
provided by operating activities:
|
||||||
Depreciation
|
3,808 | 2,240 | ||||
Amortization of intangible assets
|
871 | - | ||||
Amortization of deferred financing costs
|
736 | - | ||||
Change in deferred income tax
|
3,679 | 324 | ||||
Compensation under stock-based compensation plans
|
1,629 | 1,488 | ||||
Loss on disposal of fixed assets
|
49 | 3 | ||||
Bad debt expense
|
7,227 | 2,977 | ||||
Changes in assets and liabilities, net of acquired business:
|
||||||
Receivables, net of bad debt expense
|
(11,948 | ) | 18,458 | |||
Inventory
|
931 | (3,277 | ) | |||
Prepaid expenses and other assets
|
(7,863 | ) | (1,445 | ) | ||
Accounts payable
|
(6,162 | ) | (6,635 | ) | ||
Claims payable
|
(1,396 | ) | (379 | ) | ||
Amounts due to plan sponsors
|
2,153 | (494 | ) | |||
Accrued expenses and other liabilities
|
(10,431 | ) | 387 | |||
Net cash (used in) provided by operating activities
|
(20,758 | ) | 21,309 | |||
Cash flows from investing activities:
|
||||||
Purchases of property and equipment
|
(4,343 | ) | (3,932 | ) | ||
Cash consideration paid to CHS, net of cash acquired
|
(92,464 | ) | - | |||
Net cash used in investing activities
|
(96,807 | ) | (3,932 | ) | ||
Cash flows from financing activities:
|
||||||
Proceeds from new credit facility, net of fees paid to issuers
|
319,000 | - | ||||
Borrowings on line of credit
|
300,310 | 666,260 | ||||
Repayments on line of credit
|
(330,699 | ) | (683,604 | ) | ||
Principal payments on CHS long-term debt, paid at closing
|
(128,952 | ) | - | |||
Principal payments on long-term debt
|
(625 | ) | - | |||
Deferred financing costs paid for new credit facility
|
(8,488 | ) | - | |||
Net proceeds from exercise of employee stock compensation plans
|
1,703 | - | ||||
Surrender of stock to satisfy minimum tax withholding
|
(111 | ) | (33 | ) | ||
Net cash provided by (used in) financing activities
|
152,138 | (17,377 | ) | |||
Net change in cash and cash equivalents
|
34,573 | - | ||||
Cash and cash equivalents - beginning of period
|
- | - | ||||
Cash and cash equivalents - end of period
|
$ | 34,573 | $ | - | ||
DISCLOSURE OF CASH FLOW INFORMATION:
|
||||||
Cash paid during the period for interest
|
$ | 2,971 | $ | 1,085 | ||
Cash paid during the period for income taxes
|
$ | 515 | $ | 273 |
Fair value of equity consideration:
|
|||
BioScrip common stock issued (13.1 million shares)
|
$ | 91,614 | |
BioScrip warrants issued (3.4 million warrants)
|
12,268 | ||
Rollover options (716,086 options)
|
2,802 | ||
Cash paid to CHS stockholders
|
99,626 | ||
Total consideration conveyed to CHS stockholders
|
$ | 206,310 | |
Cash paid for merger related expenses incurred by CHS
|
14,566 | ||
Assumption and repayment of CHS debt
|
128,952 | ||
Total amounts paid to execute the merger of CHS
|
$ | 349,828 |
Cash and cash equivalents
|
$ | 7,162 | ||||
Receivables
|
37,216 | |||||
Other current assets
|
12,024 | |||||
Property and equipment
|
7,042 | |||||
Other assets
|
12,259 | |||||
Total assets acquired
|
75,703 | |||||
Accounts payable
|
(3,147 | ) | ||||
Notes payable
|
(2,250 | ) | ||||
Amounts due to plan sponsors
|
(8,180 | ) | ||||
Accrued expenses and other current liabilities
|
(32,873 | ) | ||||
Deferred tax liabilities
|
(14,541 | ) | ||||
Total liabilities assumed
|
(60,991 | ) | ||||
Tangible assets acquired, net
|
$ | 14,712 | ||||
Intangible assets acquired
|
25,200 | |||||
Debt assumed
|
(128,952 | ) | ||||
Goodwill
|
295,350 | |||||
Total consideration conveyed to CHS stockholders
|
$ | 206,310 |
Estimated
|
||||||
Remaining Useful
|
||||||
Life (in years)
|
Fair Value
|
|||||
Trademarks/trade names
|
various
|
$ | 8,400 | |||
Infusion customer relationships
|
3 | 7,200 | ||||
Certificates of need
|
indefinite
|
9,600 | ||||
$ | 25,200 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(as reported)
|
(pro forma)
|
(pro forma)
|
(pro forma)
|
|||||||||||||
Revenue
|
$ | 412,030 | $ | 389,244 | $ | 807,877 | $ | 780,822 | ||||||||
Net income (loss)
|
$ | 3,128 | $ | 2,420 | $ | (2,018 | ) | $ | 5,731 | |||||||
Basic and diluted income (loss) per common share
|
$ | 0.06 | $ | 0.05 | $ | (0.04 | ) | $ | 0.11 |
Infusion/Home
|
Pharmacy
|
||||||||
Health Servcies
|
Services
|
Total
|
|||||||
Balance as of December 31, 2009
|
$ | - | $ | 24,498 | $ | 24,498 | |||
Preliminary goodwill valued as of the date of the CHS acquisition
|
304,185 | - | 304,185 | ||||||
Adjustments to goodwill related to CHS acquisition
|
(8,835 | ) | - | (8,835 | ) | ||||
Balance as of June 30, 2010 (Note 3)
|
$ | 295,350 | $ | 24,498 | $ | 319,848 |
June 30, 2010
|
||||||||||||
Estimated
|
Gross
|
Net
|
||||||||||
Remaining Useful
|
Carrying
|
Accumulated
|
Carrying
|
|||||||||
Life (in years)
|
Amount
|
Amortization
|
Amount
|
|||||||||
Infusion trademark
|
3 | $ | 2,600 | $ | (231 | ) | $ | 2,369 | ||||
Nursing trademark
|
indefinite
|
5,800 | - | 5,800 | ||||||||
Infusion customer relationships
|
3 | 7,200 | (640 | ) | 6,560 | |||||||
Certificates of need
|
indefinite
|
9,600 | - | 9,600 | ||||||||
$ | 25,200 | $ | (871 | ) | $ | 24,329 |
2010
|
$ | 2,522 | ||
2011
|
3,276 | |||
2012
|
3,276 | |||
2013
|
726 |
Three Months Ended
|
Six Months Ended
|
|||||||||||
June 30,
|
June 30,
|
|||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||
Numerator:
|
||||||||||||
Net (loss) income
|
$ | 3,128 | $ | 4,377 | $ | (4,041 | ) | $ | 7,662 | |||
Denominator - Basic:
|
||||||||||||
Weighted average number of common shares outstanding
|
53,310 | 38,748 | 47,101 | 38,729 | ||||||||
Basic income (loss) per common share
|
$ | 0.06 | $ | 0.11 | $ | (0.09 | ) | $ | 0.20 | |||
Denominator - Diluted:
|
||||||||||||
Weighted average number of common shares outstanding
|
53,310 | 38,748 | 47,101 | 38,729 | ||||||||
Common share equivalents of outstanding stock options and restricted awards
|
1,495 | 479 | - | 297 | ||||||||
Total diluted shares outstanding
|
54,805 | 39,227 | 47,101 | 39,026 | ||||||||
Diluted income (loss) per common share
|
$ | 0.06 | $ | 0.11 | $ | (0.09 | ) | $ | 0.20 |
Three Months Ended
|
Six Months Ended
|
|||||||||||
June 30,
|
June 30,
|
|||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||
Results of Operations:
|
||||||||||||
Revenue:
|
||||||||||||
Infusion/Home Health Services
|
$ | 106,675 | $ | 36,401 | $ | 152,776 | $ | 70,804 | ||||
Pharmacy Services
|
305,355 | 292,348 | 594,322 | 583,694 | ||||||||
Total
|
$ | 412,030 | $ | 328,749 | $ | 747,098 | $ | 654,498 | ||||
Adjusted EBITDA by Segment before corporate overhead:
|
||||||||||||
Infusion/Home Health Services
|
$ | 13,902 | $ | 2,662 | $ | 16,762 | $ | 4,835 | ||||
Pharmacy Services
|
12,402 | 11,335 | 20,389 | 21,296 | ||||||||
Total Segment Adjusted EBITDA
|
$ | 26,304 | $ | 13,997 | $ | 37,151 | $ | 26,131 | ||||
Corporate overhead
|
(7,883 | ) | (6,972 | ) | (16,045 | ) | (12,935 | ) | ||||
Consolidated Adjusted EBITDA
|
$ | 18,421 | $ | 7,025 | $ | 21,106 | $ | 13,196 | ||||
Interest expense, net
|
(8,224 | ) | (430 | ) | (11,393 | ) | (1,024 | ) | ||||
Income tax (expense) benefit
|
(2,166 | ) | (377 | ) | 136 | (782 | ) | |||||
Depreciation
|
(2,324 | ) | (1,129 | ) | (3,808 | ) | (2,240 | ) | ||||
Amortization
|
(695 | ) | - | (871 | ) | - | ||||||
Stock-based compensation expense
|
(825 | ) | (712 | ) | (1,629 | ) | (1,488 | ) | ||||
Transaction related expenses
|
(1,059 | ) | - | (6,099 | ) | - | ||||||
Bad debt expenses related to contract termination
|
- | - | (1,483 | ) | - | |||||||
Net income (loss):
|
$ | 3,128 | $ | 4,377 | $ | (4,041 | ) | $ | 7,662 | |||
Supplemental Operating Data
|
||||||||||||
Capital Expenditures:
|
||||||||||||
Infusion/Home Health Services
|
$ | 1,180 | $ | 228 | $ | 1,252 | $ | 328 | ||||
Pharmacy Services
|
1,401 | 1,624 | 1,941 | 2,468 | ||||||||
Corporate unallocated
|
320 | 1,000 | 1,150 | 1,136 | ||||||||
Total
|
$ | 2,901 | $ | 2,852 | $ | 4,343 | $ | 3,932 | ||||
Depreciation Expense:
|
||||||||||||
Infusion/Home Health Services
|
$ | 1,018 | $ | 302 | $ | 1,254 | $ | 627 | ||||
Pharmacy Services
|
1,042 | 581 | 2,065 | 1,092 | ||||||||
Corporate unallocated
|
264 | 246 | 489 | 521 | ||||||||
Total
|
$ | 2,324 | $ | 1,129 | $ | 3,808 | $ | 2,240 | ||||
Total Assets:
|
||||||||||||
Infusion/Home Health Services
|
$ | 432,502 | $ | 54,325 | ||||||||
Pharmacy Services
|
131,078 | 123,299 | ||||||||||
Corporate unallocated
|
155,126 | 54,308 | ||||||||||
Total
|
$ | 718,706 | $ | 231,932 | ||||||||
Goodwill:
|
||||||||||||
Infusion/Home Health Services
|
$ | 295,350 | $ | - | ||||||||
Pharmacy Services
|
24,498 | 24,498 | ||||||||||
Total
|
$ | 319,848 | $ | 24,498 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Expected volatility
|
63.0 | % | 67.0 | % | 63.1 | % | 66.5 | % | ||||||||
Risk-free interest rate
|
3.39 | % | 3.05 | % | 3.41 | % | 2.94 | % | ||||||||
Expected life of options
|
5.7 years
|
5.6 years
|
5.7 years
|
5.6 years
|
||||||||||||
Dividend rate
|
- | - | - | - | ||||||||||||
Fair value of options
|
$ | 4.31 | $ | 1.66 | $ | 4.30 | $ | 1.52 |
|
·
|
Our expectations regarding financial condition or results of operations in future periods;
|
|
·
|
our future sources of, and needs for, liquidity and capital resources;
|
|
·
|
our expectations regarding economic and business conditions;
|
|
·
|
our expectations regarding the size and growth of the market for our products and services;
|
|
·
|
our business strategies and our ability to grow our business;
|
|
·
|
the implementation or interpretation of current or future regulations and legislation, particularly governmental oversight of our business;
|
|
·
|
our ability to maintain contracts and relationships with our customers;
|
|
·
|
sales and marketing efforts;
|
|
·
|
status of material contractual arrangements, including the negotiation or re-negotiation of such arrangements;
|
|
·
|
future capital expenditures;
|
|
·
|
our ability to successfully complete the integration of Critical Homecare Solutions Holdings, Inc. (“CHS”) and subsidiaries and realize the anticipated synergies of the acquisition;
|
|
·
|
our revenues following the merger;
|
|
·
|
our high level of indebtedness;
|
|
·
|
our ability to make principal payments on our debt and satisfy the other covenants contained in our senior secured credit facility and other debt agreement;
|
|
·
|
our ability to hire and retain key employees; and
|
|
·
|
other risks and uncertainties described from time to time in our filings with the SEC.
|
|
·
|
Risks associated with increased government regulation related to the health care and insurance industries in general, and more specifically, pharmacy benefit management and specialty pharmaceutical distribution organizations;
|
|
·
|
unfavorable economic and market conditions;
|
|
·
|
reductions in Federal and state reimbursement;
|
|
·
|
delays or suspensions of Federal and state payments for services provided;
|
|
·
|
efforts to reduce healthcare costs and alter health care financing;
|
|
·
|
existence of complex laws and regulations relating to our business;
|
|
·
|
achieving financial covenants under our credit facility;
|
|
·
|
availability of financing sources;
|
|
·
|
declines and other changes in revenue due to expiration of short-term contracts;
|
|
·
|
network lock-outs and decisions to in-source by health insurers;
|
|
·
|
unforeseen problems arising from contract terminations;
|
|
·
|
difficulties in the implementation and conversion of our new pharmacy system;
|
·
|
increases or other changes in the Company’s acquisition cost for its products;
|
|
·
|
increased competition from our competitors, including competitors with greater financial, technical, marketing and other resources, could have the effect of reducing prices and margins;
|
|
·
|
the significant indebtedness incurred to complete the acquisition may limit our ability to execute our business strategy and increase the risk of default under our debt obligations,
|
|
·
|
introduction of new drugs can cause prescribers to adopt therapies for existing patients that are less profitable to us; and
|
|
·
|
changes in industry pricing benchmarks could have the effect of reducing prices and margins.
|
Three Months Ended June 30,
|
|||||||||||||||||
2010
|
2009
|
Change
|
|||||||||||||||
Revenue
|
$ | 412,030 | $ | 328,749 | $ | 83,281 | |||||||||||
Gross profit
|
$ | 73,524 | 17.8 | % | $ | 38,388 | 11.7 | % | $ | 35,136 | |||||||
Income from operations
|
$ | 13,518 | 3.3 | % | $ | 5,184 | 1.6 | % | $ | 8,334 | |||||||
Interest expense, net
|
$ | 8,224 | 2.0 | % | $ | 430 | 0.1 | % | $ | 7,794 | |||||||
Income before income taxes
|
$ | 5,294 | 1.3 | % | $ | 4,754 | 1.4 | % | $ | 540 | |||||||
Net income
|
$ | 3,128 | 0.8 | % | $ | 4,377 | 1.3 | % | $ | (1,249 | ) |
Six Months Ended June 30,
|
|||||||||||||||||
2010
|
2009
|
Change
|
|||||||||||||||
Revenue
|
$ | 747,098 | $ | 654,498 | $ | 92,600 | |||||||||||
Gross profit
|
$ | 112,441 | 15.1 | % | $ | 74,378 | 11.4 | % | $ | 38,063 | |||||||
Income from operations
|
$ | 7,216 | 1.0 | % | $ | 9,468 | 1.4 | % | $ | (2,252 | ) | ||||||
Interest expense, net
|
$ | 11,393 | 1.5 | % | $ | 1,024 | 0.2 | % | $ | 10,369 | |||||||
(Loss) income before income taxes
|
$ | (4,177 | ) | -0.6 | % | $ | 8,444 | 1.3 | % | $ | (12,621 | ) | |||||
Net (loss) income
|
$ | (4,041 | ) | -0.5 | % | $ | 7,662 | 1.2 | % | $ | (11,703 | ) |
Three Months Ended
|
Six Months Ended
|
|||||||||||
June 30,
|
June 30,
|
|||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||
Results of Operations:
|
||||||||||||
Revenue:
|
||||||||||||
Infusion/Home Health Services
|
$ | 106,675 | $ | 36,401 | $ | 152,776 | $ | 70,804 | ||||
Pharmacy Services
|
305,355 | 292,348 | 594,322 | 583,694 | ||||||||
Total
|
$ | 412,030 | $ | 328,749 | $ | 747,098 | $ | 654,498 | ||||
Adjusted EBITDA by Segment before corporate overhead:
|
||||||||||||
Infusion/Home Health Services
|
$ | 13,902 | $ | 2,662 | $ | 16,762 | $ | 4,835 | ||||
Pharmacy Services
|
12,402 | 11,335 | 20,389 | 21,296 | ||||||||
Total Segment Adjusted EBITDA
|
$ | 26,304 | $ | 13,997 | $ | 37,151 | $ | 26,131 | ||||
Corporate overhead
|
(7,883 | ) | (6,972 | ) | (16,045 | ) | (12,935 | ) | ||||
Consolidated Adjusted EBITDA
|
$ | 18,421 | $ | 7,025 | $ | 21,106 | $ | 13,196 | ||||
Interest expense, net
|
(8,224 | ) | (430 | ) | (11,393 | ) | (1,024 | ) | ||||
Income tax (expense) benefit
|
(2,166 | ) | (377 | ) | 136 | (782 | ) | |||||
Depreciation
|
(2,324 | ) | (1,129 | ) | (3,808 | ) | (2,240 | ) | ||||
Amortization
|
(695 | ) | - | (871 | ) | - | ||||||
Stock-based compensation expense
|
(825 | ) | (712 | ) | (1,629 | ) | (1,488 | ) | ||||
Transaction related expenses
|
(1,059 | ) | - | (6,099 | ) | - | ||||||
Bad debt expenses related to contract termination
|
- | - | (1,483 | ) | - | |||||||
Net income (loss):
|
$ | 3,128 | $ | 4,377 | $ | (4,041 | ) | $ | 7,662 |
|
·
|
Our inability to achieve the cost savings and operating synergies anticipated in the merger, including synergies relating to increased purchasing efficiencies and a reduction in costs associated with the merger, which would prevent us from achieving the positive earnings gains expected as a result of the merger;
|
|
·
|
diversion of management attention from ongoing business concerns to integration matters;
|
|
·
|
difficulties in consolidating and rationalizing IT platforms and administrative infrastructures;
|
|
·
|
complexities associated with managing the geographic separation of the combined businesses and consolidating multiple physical locations where management may determine consolidation is desirable;
|
|
·
|
difficulties in integrating personnel from different corporate cultures while maintaining focus on providing consistent, high quality customer service;
|
|
·
|
challenges in demonstrating to customers of BioScrip and to customers of CHS that the merger will not result in adverse changes in customer service standards or business focus; and
|
|
·
|
possible cash flow interruption or loss of revenue as a result of change of ownership transitional matters.
|
|
·
|
Incur indebtedness or liens;
|
|
·
|
make investments or capital expenditures;
|
|
·
|
engage in mergers, acquisitions or asset sales;
|
|
·
|
declare dividends or redeem or repurchase capital stock;
|
|
·
|
modify our organizational documents; and
|
|
·
|
change our fiscal year.
|
|
·
|
Materially and adversely affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or other purposes;
|
|
·
|
make us more vulnerable to general adverse economic, regulatory and industry conditions;
|
|
·
|
limit our flexibility in planning for, or reacting to, changes and opportunities in the markets in which we compete;
|
|
·
|
place us at a competitive disadvantage compared to our competitors that have less debt or could require us to dedicate a substantial portion of our cash flow to service our debt;
|
|
·
|
make it more difficult for us to satisfy our obligations with respect to the new notes;
|
|
·
|
reduce the funds available to us for operations and other purposes;
|
|
·
|
limit our ability to fund the repurchase of the new notes upon a change of control; or
|
|
·
|
restrict us from making strategic acquisitions or exploiting other business opportunities.
|
|
·
|
Incur or guarantee additional indebtedness or issue certain preferred stock;
|
|
·
|
transfer or sell assets;
|
|
·
|
make certain investments;
|
|
·
|
pay dividends or distributions, redeem subordinated indebtedness or make other restricted payments;
|
|
·
|
create or incur liens;
|
|
·
|
incur dividend or other payment restrictions affecting certain subsidiaries;
|
|
·
|
issue capital stock of our subsidiaries;
|
|
·
|
consummate a merger, consolidation or sale of all or substantially all of our assets; and
|
|
·
|
enter into transactions with affiliates.
|
|
·
|
It was insolvent or rendered insolvent by reason of issuing the guarantee;
|
|
·
|
it was engaged, or about to engage, in a business or transaction for which its remaining unencumbered assets constituted unreasonably small capital to carry on its business;
|
|
·
|
it intended to incur, or believed that it would incur, debts beyond its ability to pay as they mature; or
|
|
·
|
it was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, after final judgment, the judgment is unsatisfied, then the court could void the obligations under the guarantee, subordinate the guarantee of the new notes to other debt or take other action detrimental to holders of the new notes.
|
BIOSCRIP, INC.
|
|
Date: August 3, 2010
|
/s/ Phillip J. Keller
|
Phillip J. Keller, Senior Vice President of Finance and
|
|
Principal Accounting Officer
|
Extended Semi-Monthly Monthly Pay (EFT) –
[*****]
|
||||
[*****]
|
||||
Monthly Net Purchase Volume
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
BIOSCRIP INC.
|
BIOSCRIP INFUSION SERVICES, INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
CHRONIMED, LLC
|
LOS FELIZ INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
BIOSCRIP PHARMACY, INC.
|
BRADHURST SPECIALTY
PHARMACY, INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
BIOSCRIP PHARMACY (NY), INC.
|
BIOSCRIP PBM SERVICES, LLC
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
NATURAL LIVING, INC.
|
BIOSCRIP INFUSION SERVICES, LLC
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
BIOSCRIP NURSING SERVICES, LLC
|
BIOSCRIP INFUSION MANAGEMENT, LLC
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
CRITICAL HOMECARE SOLUTIONS, INC.
|
SPECIALTY PHARMA, INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
NEW ENGLAND HOME THERAPIES, INC.
|
DEACONESS ENTERPRISES, LLC,
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
INFUSION SOLUTIONS, INC
|
PROFESSIONAL HOME CARE SERVICES, INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
WILCOX MEDICAL, INC.
|
DEACONESS HOMECARE, LLC
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
SOUTH MISSISSIPPI HOME REGIONAL HEALTH, INC.
|
AMBULATORY DIAGNOSTICS, INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
ELK VALLEY PROFESSIONAL AFFILIATES, INC.
|
INFUSION PARTNERS, LLC,
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
KNOXVILLE HOME THERAPIES, LLC
|
SOUTH MISSISSIPPI HOME HEALTH, INC.-REGION I
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
SOUTH MISSISSIPPI HOME HEALTH, INC. - REGION II
|
APPLIED HEALTH CARE, LLC
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
EAST GOSHEN PHARMACY, INC.
|
INFUSION PARTNERS OF BRUNSWICK, LLC
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
SCOTT WILSON, INC.
|
INFUSION PARTNERS OF MELBOURNE, LLC
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
ELK VALLEY HOME HEALTH CARE AGENCY, INC.
|
GERICARE, INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
CEDAR CREEK HOME HEALTH CARE AGENCY, INC.
|
ELK VALLEY HEALTH SERVICES, INC.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
NATIONAL HEALTH INFUSION, INC.
|
OPTION HEALTH, LTD.
|
By:
/s/ Barry A. Posner
|
By:
/s/ Barry A. Posner
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
BIOSCRIP PHARMACY SERVICES, INC.
|
|
By:
/s/ Barry A. Posner
|
|
Name: Barry A. Posner
Title: EVP and General Counsel
|
|
AMERISOURCEBERGEN DRUG CORPORATION
|
|
By:
/s/ Mitch Blumenfeld
|
|
Name: Mitch Blumenfeld
Title: CFO
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|