|
|
|
|
|
(Mark One)
|
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended March 31, 2013
|
|
OR
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
Delaware
|
05-0489664
|
(State of incorporation)
|
(I.R.S. Employer Identification No.)
|
100 Clearbrook Road, Elmsford NY
|
10523
|
(Address of principal executive offices)
|
(Zip Code)
|
|
|
Page
Number
|
PART I
|
||
|
|
|
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||
|
||
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||
|
||
|
|
|
PART II
|
||
|
|
|
|
|
|
|
||
EXHIBITS
|
|
|
Item 1.
|
Financial Statements
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
62,101
|
|
Receivables, less allowance for doubtful accounts of $21,482 and $22,212 at March 31, 2013 and December 31, 2012, respectively.
|
158,127
|
|
|
129,103
|
|
||
Inventory
|
22,819
|
|
|
34,034
|
|
||
Prepaid expenses and other current assets
|
9,081
|
|
|
10,189
|
|
||
Total current assets
|
190,027
|
|
|
235,427
|
|
||
Property and equipment, net
|
27,767
|
|
|
23,721
|
|
||
Goodwill
|
414,234
|
|
|
350,810
|
|
||
Intangible assets, net
|
19,364
|
|
|
17,446
|
|
||
Deferred financing costs
|
2,522
|
|
|
2,877
|
|
||
Investments in and advances to unconsolidated affiliate
|
10,415
|
|
|
10,042
|
|
||
Other non-current assets
|
1,385
|
|
|
2,053
|
|
||
Total assets
|
$
|
665,714
|
|
|
$
|
642,376
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
27,992
|
|
|
$
|
953
|
|
Accounts payable
|
32,108
|
|
|
34,438
|
|
||
Claims payable
|
7,599
|
|
|
7,411
|
|
||
Amounts due to plan sponsors
|
16,303
|
|
|
18,173
|
|
||
Accrued interest
|
11,575
|
|
|
5,803
|
|
||
Accrued expenses and other current liabilities
|
37,580
|
|
|
41,491
|
|
||
Total current liabilities
|
133,157
|
|
|
108,269
|
|
||
Long-term debt, net of current portion
|
225,372
|
|
|
225,426
|
|
||
Deferred taxes
|
10,748
|
|
|
10,291
|
|
||
Other non-current liabilities
|
8,971
|
|
|
4,981
|
|
||
Total liabilities
|
378,248
|
|
|
348,967
|
|
||
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: 59,695,646 and 59,600,713, respectively; shares outstanding: 57,113,126 and 57,026,957, respectively
|
6
|
|
|
6
|
|
||
Treasury stock, shares at cost: 2,582,520 and 2,582,520, respectively
|
(10,311
|
)
|
|
(10,311
|
)
|
||
Additional paid-in capital
|
390,983
|
|
|
388,798
|
|
||
Accumulated deficit
|
(93,212
|
)
|
|
(85,084
|
)
|
||
Total stockholders' equity
|
287,466
|
|
|
293,409
|
|
||
Total liabilities and stockholders' equity
|
$
|
665,714
|
|
|
$
|
642,376
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
Product revenue
|
|
$
|
150,024
|
|
|
$
|
106,803
|
|
Service revenue
|
|
49,047
|
|
|
48,830
|
|
||
Total revenue
|
|
199,071
|
|
|
155,633
|
|
||
|
|
|
|
|
||||
Cost of product revenue
|
|
105,533
|
|
|
72,326
|
|
||
Cost of service revenue
|
|
30,301
|
|
|
29,785
|
|
||
Total cost of revenue
|
|
135,834
|
|
|
102,111
|
|
||
|
|
|
|
|
||||
Gross profit
|
|
63,237
|
|
|
53,522
|
|
||
Selling, general and administrative expenses
|
|
52,791
|
|
|
44,575
|
|
||
Bad debt expense
|
|
3,397
|
|
|
3,465
|
|
||
Acquisition and integration expenses
|
|
4,623
|
|
|
172
|
|
||
Restructuring and other expenses
|
|
1,278
|
|
|
387
|
|
||
Amortization of intangibles
|
|
2,082
|
|
|
879
|
|
||
Income from continuing operations
|
|
(934
|
)
|
|
4,044
|
|
||
Interest expense, net
|
|
6,478
|
|
|
6,569
|
|
||
Loss from continuing operations before income taxes
|
|
(7,412
|
)
|
|
(2,525
|
)
|
||
Income tax expense (benefit)
|
|
58
|
|
|
(502
|
)
|
||
Loss from continuing operations, net of income taxes
|
|
(7,470
|
)
|
|
(2,023
|
)
|
||
Loss from discontinued operations, net of income taxes
|
|
(658
|
)
|
|
(680
|
)
|
||
Net loss
|
|
$
|
(8,128
|
)
|
|
$
|
(2,703
|
)
|
|
|
|
|
|
||||
Loss per common share:
|
|
|
|
|
|
|
||
Basic loss from continuing operations
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Basic loss from discontinued operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
Basic loss
|
|
$
|
(0.14
|
)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
||||
Diluted loss from continuing operations
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Diluted loss from discontinued operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
Diluted loss
|
|
$
|
(0.14
|
)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
||
Basic
|
|
57,047
|
|
|
55,307
|
|
||
Diluted
|
|
57,047
|
|
|
55,307
|
|
|
Three Months Ended
March 31, |
||||||
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(8,128
|
)
|
|
$
|
(2,703
|
)
|
Less: loss from discontinued operations, net of income taxes
|
(658
|
)
|
|
(680
|
)
|
||
Loss from continuing operations, net of income taxes
|
(7,470
|
)
|
|
(2,023
|
)
|
||
Adjustments to reconcile loss from continuing operations, net of income taxes to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||
Depreciation
|
2,459
|
|
|
1,931
|
|
||
Amortization of intangibles
|
2,082
|
|
|
879
|
|
||
Amortization of deferred financing costs
|
356
|
|
|
284
|
|
||
Change in deferred income tax
|
457
|
|
|
(300
|
)
|
||
Compensation under stock-based compensation plans
|
1,973
|
|
|
966
|
|
||
Loss on disposal of fixed assets
|
13
|
|
|
23
|
|
||
Changes in assets and liabilities, net of amounts acquired in acquisitions:
|
|
|
|
|
|
||
Receivables, net of bad debt expense
|
(16,526
|
)
|
|
(16,761
|
)
|
||
Inventory
|
13,199
|
|
|
4,215
|
|
||
Prepaid expenses and other assets
|
2,487
|
|
|
4,238
|
|
||
Accounts payable
|
(2,822
|
)
|
|
5,587
|
|
||
Claims payable
|
187
|
|
|
(6,598
|
)
|
||
Amounts due to plan sponsors
|
(4,140
|
)
|
|
(874
|
)
|
||
Accrued expenses and other liabilities
|
(4,445
|
)
|
|
4,557
|
|
||
Net cash used in operating activities from continuing operations
|
(12,190
|
)
|
|
(3,876
|
)
|
||
Net cash (used in) provided by operating activities from discontinued operations
|
(658
|
)
|
|
6,401
|
|
||
Net cash (used in) provided by operating activities
|
(12,848
|
)
|
|
2,525
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of property and equipment, net
|
(3,655
|
)
|
|
(1,547
|
)
|
||
Cash consideration paid for acquisitions, net of cash acquired
|
(72,325
|
)
|
|
—
|
|
||
Cash consideration paid to DS Pharmacy
|
—
|
|
|
(2,935
|
)
|
||
Cash consideration paid for unconsolidated affiliate, net of cash acquired
|
(900
|
)
|
|
—
|
|
||
Net cash used in investing activities from continuing operations
|
(76,880
|
)
|
|
(4,482
|
)
|
||
Net cash provided by investing activities from discontinued operations
|
—
|
|
|
2,741
|
|
||
Net cash used in investing activities
|
(76,880
|
)
|
|
(1,741
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Borrowings on line of credit
|
214,145
|
|
|
481,151
|
|
||
Repayments on line of credit
|
(187,092
|
)
|
|
(483,224
|
)
|
||
Repayments of capital leases
|
(68
|
)
|
|
(35
|
)
|
||
Net proceeds from exercise of employee stock compensation plans
|
642
|
|
|
1,324
|
|
||
Net cash provided by (used in) financing activities
|
27,627
|
|
|
(784
|
)
|
||
Net change in cash and cash equivalents
|
(62,101
|
)
|
|
—
|
|
||
Cash and cash equivalents - beginning of period
|
62,101
|
|
|
—
|
|
||
Cash and cash equivalents - end of period
|
$
|
—
|
|
|
$
|
—
|
|
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
||
Cash paid during the period for interest
|
$
|
322
|
|
|
$
|
1,241
|
|
Cash paid during the period for income taxes
|
$
|
(6
|
)
|
|
$
|
197
|
|
DISCLOSURE OF NON-CASH TRANSACTIONS:
|
|
|
|
||||
Capital lease obligations incurred to acquire property and equipment
|
$
|
—
|
|
|
$
|
20
|
|
NOTE 1--
|
BASIS OF PRESENTATION
|
NOTE 2--
|
EARNINGS PER SHARE
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
Numerator:
|
|
|
|
|
||||
Loss from continuing operations, net of income taxes
|
|
$
|
(7,470
|
)
|
|
$
|
(2,023
|
)
|
Loss from discontinued operations, net of income taxes
|
|
(658
|
)
|
|
(680
|
)
|
||
Net loss
|
|
$
|
(8,128
|
)
|
|
$
|
(2,703
|
)
|
|
|
|
|
|
||||
Denominator - Basic:
|
|
|
|
|
|
|
||
Weighted average number of common shares outstanding
|
|
57,047
|
|
|
55,307
|
|
||
|
|
|
|
|
||||
Basic loss from continuing operations
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Basic loss from discontinued operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
Basic loss
|
|
$
|
(0.14
|
)
|
|
$
|
(0.05
|
)
|
|
|
|
|
|
||||
Denominator - Diluted:
|
|
|
|
|
|
|
||
Weighted average number of common shares outstanding
|
|
57,047
|
|
|
55,307
|
|
||
Common share equivalents of outstanding stock options and restricted awards
|
|
—
|
|
|
—
|
|
||
Total diluted shares outstanding
|
|
57,047
|
|
|
55,307
|
|
||
|
|
|
|
|
||||
Diluted loss from continuing operations
|
|
$
|
(0.13
|
)
|
|
$
|
(0.04
|
)
|
Diluted loss from discontinued operations
|
|
(0.01
|
)
|
|
(0.01
|
)
|
||
Diluted loss
|
|
$
|
(0.14
|
)
|
|
$
|
(0.05
|
)
|
NOTE 3--
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
NOTE 4--
|
BUSINESS COMBINATIONS
|
|
Amounts
Recognized as of
Acquisition Date
(in thousands)
|
||
Accounts receivable
|
$
|
12,498
|
|
Inventories
|
1,984
|
|
|
Other current assets
|
154
|
|
|
Property and equipment
|
2,864
|
|
|
Identifiable intangible assets
(a)
|
4,000
|
|
|
Other non-current assets
|
30
|
|
|
Current liabilities
|
(4,624
|
)
|
|
Total identifiable net assets
|
16,906
|
|
|
Goodwill
|
63,419
|
|
|
Total fair value of cash and contingent consideration
|
$
|
80,325
|
|
(a)
|
The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:
|
|
Weighted-
Average
Useful Lives
|
Amounts
Recognized as of
Acquisition Date
(in thousands)
|
||
Customer relationships
|
5 mo. - 3 years
|
$
|
2,000
|
|
Trademarks
|
23 months
|
1,000
|
|
|
Non-compete agreements
|
1 year
|
1,000
|
|
|
Total identifiable intangible assets acquired
|
|
$
|
4,000
|
|
|
Amounts
Recognized as of
Acquisition Date
(in thousands)
|
||
Cash
|
$
|
23
|
|
Accounts receivable
|
4,938
|
|
|
Inventories
|
586
|
|
|
Other current assets
|
371
|
|
|
Property and equipment
|
751
|
|
|
Identifiable intangible assets
(a)
|
400
|
|
|
Other non-current assets
|
349
|
|
|
Current liabilities
|
(4,428
|
)
|
|
Total identifiable net assets
|
2,990
|
|
|
Goodwill
|
38,429
|
|
|
Total fair value of cash and contingent consideration
|
$
|
41,419
|
|
(a)
|
The following table summarizes the provisional amounts and useful lives assigned to identifiable intangible assets:
|
|
Weighted-
Average
Useful Lives
(Months)
|
Amounts
Recognized as of
Acquisition Date
(in thousands)
|
||
InfuScience customer relationships
|
5
|
400
|
|
|
Total identifiable intangible assets acquired
|
5
|
$
|
400
|
|
|
|
Three Months Ended
March 31,
|
||||
|
|
2013
|
|
2012
|
||
Revenues
|
|
205,163
|
|
|
182,458
|
|
Total net loss from continuing operations
|
|
(4,815
|
)
|
|
(3,917
|
)
|
Basic loss per share
|
|
(0.08
|
)
|
|
(0.07
|
)
|
Diluted loss per share
|
|
(0.08
|
)
|
|
(0.07
|
)
|
|
|
Three Months Ended
March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Interest expense
|
|
$
|
292
|
|
|
$
|
1,063
|
|
Tax benefit
|
|
$
|
(117
|
)
|
|
$
|
(479
|
)
|
Amortization expense
|
|
$
|
(495
|
)
|
|
$
|
1,304
|
|
NOTE 5--
|
DISCONTINUED OPERATIONS
|
|
|
|
Employee Severance
and Other Benefits
|
|
Other Costs
|
|
Total
|
||||||
Liability balance as of December 31, 2012
|
|
|
$
|
45
|
|
|
$
|
89
|
|
|
$
|
134
|
|
Cash payments
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Liability balance as of March 31, 2013
|
|
|
$
|
43
|
|
|
$
|
89
|
|
|
$
|
132
|
|
Inventory
|
$
|
30,560
|
|
Prepaid expenses and other current assets
|
299
|
|
|
Total current assets
|
30,859
|
|
|
Property and equipment, net
|
1,592
|
|
|
Goodwill
|
11,754
|
|
|
Intangible assets, net
|
2,503
|
|
|
Total assets
|
$
|
46,708
|
|
Discontinued Operations Results
|
||||||||
(in thousands)
|
||||||||
|
|
|
|
|
||||
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
|
|
|
|
|
||||
Revenue
|
|
$
|
(20
|
)
|
|
$
|
338,103
|
|
|
|
|
|
|
||||
Gross profit
|
|
$
|
(68
|
)
|
|
$
|
22,960
|
|
|
|
|
|
|
||||
Operating expense
|
|
$
|
619
|
|
|
$
|
22,916
|
|
|
|
|
|
|
||||
Loss from discontinued operations, net of income taxes
|
|
$
|
(658
|
)
|
|
$
|
(680
|
)
|
NOTE 6--
|
GOODWILL AND INTANGIBLE ASSETS
|
|
March 31, 2013
|
|
December 31, 2012
|
||||
Infusion
|
$
|
367,706
|
|
|
$
|
304,282
|
|
Home Health Services
|
33,784
|
|
|
33,784
|
|
||
PBM Services
|
12,744
|
|
|
12,744
|
|
||
Total
|
$
|
414,234
|
|
|
$
|
350,810
|
|
|
|
|
March 31, 2013
|
||||||||||
|
Estimated
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Indefinite Lived Assets
|
|
|
|
|
|
|
|
||||||
Certificates of need
|
indefinite
|
|
$
|
9,600
|
|
|
$
|
—
|
|
|
$
|
9,600
|
|
Nursing trademarks
|
indefinite
|
|
5,800
|
|
|
—
|
|
|
5,800
|
|
|||
|
|
|
15,400
|
|
|
—
|
|
|
15,400
|
|
|||
Definite Lived Assets
|
|
|
|
|
|
|
|
|
|
|
|||
Infusion customer relationships
|
5 months - 3 years
|
|
11,300
|
|
|
(9,083
|
)
|
|
2,217
|
|
|||
Infusion trademarks
|
23 months - 3 years
|
|
3,600
|
|
|
(2,687
|
)
|
|
913
|
|
|||
Non-compete agreements
|
1 year
|
|
1,000
|
|
|
(166
|
)
|
|
834
|
|
|||
|
|
|
15,900
|
|
|
(11,936
|
)
|
|
3,964
|
|
|||
|
|
|
$
|
31,300
|
|
|
$
|
(11,936
|
)
|
|
$
|
19,364
|
|
|
|
|
December 31, 2012
|
||||||||||
|
Estimated
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||
Indefinite Lived Assets
|
|
|
|
|
|
|
|
||||||
Certificates of need
|
indefinite
|
|
$
|
9,600
|
|
|
$
|
—
|
|
|
$
|
9,600
|
|
Nursing trademarks
|
indefinite
|
|
5,800
|
|
|
—
|
|
|
5,800
|
|
|||
|
|
|
15,400
|
|
|
—
|
|
|
15,400
|
|
|||
Definite Lived Assets
|
|
|
|
|
|
|
|
||||||
Infusion customer relationships
|
6 months- 3 years
|
|
9,300
|
|
|
(7,447
|
)
|
|
1,853
|
|
|||
Infusion trademarks
|
3 years
|
|
2,600
|
|
|
(2,407
|
)
|
|
193
|
|
|||
|
|
|
11,900
|
|
|
(9,854
|
)
|
|
2,046
|
|
|||
|
|
|
$
|
27,300
|
|
|
$
|
(9,854
|
)
|
|
$
|
17,446
|
|
2013 (nine months)
|
$
|
2,664
|
|
2014
|
939
|
|
|
2015 and beyond
|
361
|
|
|
Total
|
$
|
3,964
|
|
NOTE 7--
|
RESTRUCTURING AND OTHER EXPENSES
|
|
|
Employee Severance
and Other Benefits
|
|
Consulting
Costs
|
|
Facility-Related Costs
|
|
Total
|
||||||||
Liability balance as of December 31, 2012
|
|
$
|
163
|
|
|
$
|
20
|
|
|
$
|
841
|
|
|
$
|
1,024
|
|
Expenses
|
|
—
|
|
|
(20
|
)
|
|
(98
|
)
|
|
(118
|
)
|
||||
Cash payments
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(31
|
)
|
||||
Liability balance as of March 31, 2013
|
|
$
|
163
|
|
|
$
|
—
|
|
|
$
|
712
|
|
|
$
|
875
|
|
|
|
Employee Severance
and Other Benefits
|
|
Consulting
Costs
|
|
Other Costs
|
|
Total
|
||||||||
Liability balance as of December 31, 2012
|
|
$
|
559
|
|
|
$
|
145
|
|
|
$
|
—
|
|
|
$
|
704
|
|
Expenses
|
|
382
|
|
|
19
|
|
|
73
|
|
|
474
|
|
||||
Cash payments
|
|
(296
|
)
|
|
(145
|
)
|
|
(73
|
)
|
|
(514
|
)
|
||||
Liability balance as of March 31, 2013
|
|
$
|
645
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
664
|
|
NOTE 8--
|
PROPERTY AND EQUIPMENT
|
|
March 31,
2013 |
|
December 31,
2012 |
||||
Computer and office equipment, including equipment acquired under capital leases
|
$
|
14,976
|
|
|
$
|
14,443
|
|
Software capitalized for internal use
|
9,939
|
|
|
9,939
|
|
||
Vehicles, including equipment acquired under capital leases
|
1,630
|
|
|
1,540
|
|
||
Medical equipment
|
17,627
|
|
|
16,466
|
|
||
Work in progress
|
7,178
|
|
|
4,315
|
|
||
Furniture and fixtures
|
3,539
|
|
|
3,219
|
|
||
Leasehold improvements
|
8,383
|
|
|
7,164
|
|
||
|
63,272
|
|
|
57,086
|
|
||
Less: Accumulated depreciation
|
(35,505
|
)
|
|
(33,365
|
)
|
||
Property and equipment, net
|
$
|
27,767
|
|
|
$
|
23,721
|
|
NOTE 9--
|
DEBT
|
Revolving credit facility
|
$
|
27,053
|
|
Senior unsecured notes
|
225,000
|
|
|
Capital leases
|
1,311
|
|
|
|
253,364
|
|
|
Less - obligations maturing within one year
|
27,992
|
|
|
Long term debt - net of current portion
|
$
|
225,372
|
|
NOTE 10--
|
COMMITMENTS AND CONTINGENCIES
|
|
Operating Leases
|
Capital Leases
|
Total
|
||||||
2013 (nine months)
|
$
|
5,436
|
|
$
|
185
|
|
$
|
5,621
|
|
2014
|
6,535
|
|
225
|
|
6,760
|
|
|||
2015
|
5,481
|
|
192
|
|
5,673
|
|
|||
2016
|
4,518
|
|
23
|
|
4,541
|
|
|||
2017
|
3,815
|
|
—
|
|
3,815
|
|
|||
2018 and thereafter
|
5,024
|
|
—
|
|
5,024
|
|
|||
Total
|
$
|
30,809
|
|
$
|
625
|
|
$
|
31,434
|
|
NOTE 11--
|
OPERATING AND REPORTABLE SEGMENTS
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
Results of Operations:
|
|
|
|
|
||||
Revenue:
|
|
|
|
|
||||
Infusion Services - product revenue
|
|
$
|
150,024
|
|
|
$
|
106,803
|
|
Infusion Services - service revenue
|
|
4,353
|
|
|
2,250
|
|
||
Total Infusion Services revenue
|
|
154,377
|
|
|
109,053
|
|
||
|
|
|
|
|
||||
Home Health Services - service revenue
|
|
17,942
|
|
|
16,711
|
|
||
|
|
|
|
|
||||
PBM Services - service revenue
|
|
26,752
|
|
|
29,869
|
|
||
|
|
|
|
|
||||
Total revenue
|
|
$
|
199,071
|
|
|
$
|
155,633
|
|
|
|
|
|
|
||||
Adjusted EBITDA by Segment before corporate overhead:
|
|
|
|
|
|
|||
Infusion Services
|
|
$
|
12,315
|
|
|
$
|
7,783
|
|
Home Health Services
|
|
883
|
|
|
1,080
|
|
||
PBM Services
|
|
6,199
|
|
|
6,098
|
|
||
Total Segment Adjusted EBITDA
|
|
19,397
|
|
|
14,961
|
|
||
|
|
|
|
|
||||
Corporate overhead
|
|
(7,916
|
)
|
|
(6,582
|
)
|
||
|
|
|
|
|
||||
Interest expense, net
|
|
(6,478
|
)
|
|
(6,569
|
)
|
||
Income tax benefit
|
|
(58
|
)
|
|
502
|
|
||
Depreciation
|
|
(2,459
|
)
|
|
(1,931
|
)
|
||
Amortization of intangibles
|
|
(2,082
|
)
|
|
(879
|
)
|
||
Stock-based compensation expense
|
|
(1,973
|
)
|
|
(966
|
)
|
||
Acquisition and integration expenses
|
|
(4,623
|
)
|
|
(172
|
)
|
||
Restructuring and other expenses
|
|
(1,278
|
)
|
|
(387
|
)
|
||
Loss from continuing operations, net of income taxes
|
|
$
|
(7,470
|
)
|
|
$
|
(2,023
|
)
|
|
|
|
|
|
||||
Supplemental Operating Data
|
|
|
|
|
||||
|
|
March 31, 2013
|
|
December 31,
2012
|
||||
Total Assets:
|
|
|
|
|
||||
Infusion Services
|
|
$
|
523,857
|
|
|
$
|
438,623
|
|
Home Health Services
|
|
63,280
|
|
|
62,403
|
|
||
PBM Services
|
|
30,909
|
|
|
36,354
|
|
||
Corporate unallocated, including cash and cash equivalents
|
|
45,189
|
|
|
95,813
|
|
||
Assets associated with discontinued operations, not sold
|
|
2,479
|
|
|
9,183
|
|
||
Total
|
|
$
|
665,714
|
|
|
$
|
642,376
|
|
NOTE 12--
|
CONCENTRATION OF RISK
|
NOTE 13--
|
INCOME TAXES
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
Current
|
|
|
|
|
||||
Federal
|
|
$
|
(519
|
)
|
|
$
|
(29
|
)
|
State
|
|
120
|
|
|
(173
|
)
|
||
Total Current
|
|
(399
|
)
|
|
(202
|
)
|
||
Deferred
|
|
|
|
|
|
|
||
Federal
|
|
399
|
|
|
(262
|
)
|
||
State
|
|
58
|
|
|
(38
|
)
|
||
Total deferred
|
|
457
|
|
|
(300
|
)
|
||
Total income tax expense (benefit)
|
|
$
|
58
|
|
|
$
|
(502
|
)
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
Tax benefit at statutory rate
|
|
$
|
(2,594
|
)
|
|
$
|
(884
|
)
|
State tax benefit, net of Federal taxes
|
|
(47
|
)
|
|
(103
|
)
|
||
Change in tax contingencies
|
|
(512
|
)
|
|
6
|
|
||
Valuation allowance changes affecting income tax expense
|
|
2,818
|
|
|
430
|
|
||
Transaction related costs
|
|
236
|
|
|
—
|
|
||
Officers compensation and other
|
|
157
|
|
|
49
|
|
||
Income tax expense (benefit)
|
|
$
|
58
|
|
|
$
|
(502
|
)
|
NOTE 14--
|
STOCK-BASED COMPENSATION
|
NOTE 15--
|
SHELF REGISTRATION STATEMENT
|
NOTE 16--
|
SUBSEQUENT EVENTS
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
•
|
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 potential legislative and regulatory changes impacting the level of reimbursement received from the Medicare and state Medicaid programs;
|
•
|
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;
|
•
|
our ability to maintain supplies and services, which could be impacted by force majeure events such as war, strike, riot, crime, or "acts of God" such as hurricanes, flooding, blizzards or earthquakes;
|
•
|
future capital expenditures;
|
•
|
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 agreements;
|
•
|
our ability to hire and retain key employees;
|
•
|
our ability to successfully execute our succession plans;
|
•
|
our ability to execute our acquisition and growth strategy;
|
•
|
our ability to successfully integrate businesses we acquire; 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, home health providers, pharmacy benefit management and home infusion providers;
|
•
|
our expectation regarding the interim and ultimate outcome of commercial disputes, including litigation;
|
•
|
unfavorable economic and market conditions;
|
•
|
disruptions in supplies and services resulting from force majeure events such as war, strike, riot, crime, or "acts of God" such as hurricanes, flooding, blizzards or earthquakes;
|
•
|
reductions in federal and state reimbursement for our products and services;
|
•
|
delays or suspensions of Federal and state payments for services provided;
|
•
|
efforts to reduce healthcare costs and alter health care financing;
|
•
|
effects of the Patient Protection and Affordable Care Act, or PPACA, and the Health Care and Education Reconciliation Act of 2010, which amended PPACA, and the related accountable care organizations;
|
•
|
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 the expiration of short-term contracts;
|
•
|
network lock-outs and decisions to in-source by health insurers including lockouts with respect to acquired entities;
|
•
|
unforeseen contract terminations;
|
•
|
difficulties in the implementation and conversion of our new pharmacy systems;
|
•
|
difficulties integrating businesses we acquire;
|
•
|
increases or other changes in the Company's acquisition cost for its products;
|
•
|
increased competition from competitors having greater financial, technical, reimbursement, marketing and other resources could have the effect of reducing prices and margins;
|
•
|
the level of our indebtedness 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.
|
Discontinued Operations Results
|
||||||||
(in thousands)
|
||||||||
|
|
|
||||||
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
|
|
|
|
|
||||
Revenue
|
|
$
|
(20
|
)
|
|
$
|
338,103
|
|
|
|
|
|
|
||||
Gross profit
|
|
$
|
(68
|
)
|
|
$
|
22,960
|
|
|
|
|
|
|
||||
Operating expense
|
|
$619
|
|
$22,916
|
||||
|
|
|
|
|
||||
Loss from discontinued operations, net of income taxes
|
|
$
|
(658
|
)
|
|
$
|
(680
|
)
|
|
Three Months Ended March 31,
(in thousands)
|
||||||||||||||
|
2013
|
|
2012
|
|
Change
|
||||||||||
Revenue
|
$
|
199,071
|
|
|
|
$
|
155,633
|
|
|
|
$
|
43,438
|
|
||
Gross profit
|
$
|
63,237
|
|
31.8
|
%
|
|
$
|
53,522
|
|
34.4
|
%
|
|
$
|
9,715
|
|
Income from continuing operations
|
$
|
(934
|
)
|
(0.5
|
)%
|
|
$
|
4,044
|
|
2.6
|
%
|
|
$
|
(4,978
|
)
|
Interest expense, net
|
$
|
6,478
|
|
3.3
|
%
|
|
$
|
6,569
|
|
4.2
|
%
|
|
$
|
(91
|
)
|
Loss from continuing operations, before income taxes
|
$
|
(7,412
|
)
|
(3.7
|
)%
|
|
$
|
(2,525
|
)
|
(1.6
|
)%
|
|
$
|
(4,887
|
)
|
Loss from continuing operations, net of income taxes
|
$
|
(7,470
|
)
|
(3.8
|
)%
|
|
$
|
(2,023
|
)
|
(1.3
|
)%
|
|
$
|
(5,447
|
)
|
Loss from discontinued operations, net of income taxes
|
$
|
(658
|
)
|
(0.3
|
)%
|
|
$
|
(680
|
)
|
(0.4
|
)%
|
|
$
|
22
|
|
Net loss
|
$
|
(8,128
|
)
|
(4.1
|
)%
|
|
$
|
(2,703
|
)
|
(1.7
|
)%
|
|
$
|
(5,425
|
)
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2013
|
|
2012
|
||||
|
|
(in thousands)
|
||||||
Results of Operations:
|
|
|
|
|
||||
Adjusted EBITDA by Segment before corporate overhead:
|
|
|
|
|
||||
Infusion Services
|
|
$
|
12,315
|
|
|
$
|
7,783
|
|
Home Health Services
|
|
883
|
|
|
1,080
|
|
||
PBM Services
|
|
6,199
|
|
|
6,098
|
|
||
Total Segment Adjusted EBITDA
|
|
19,397
|
|
|
14,961
|
|
||
Corporate overhead
|
|
(7,916
|
)
|
|
(6,582
|
)
|
||
Consolidated Adjusted EBITDA
|
|
11,481
|
|
|
8,379
|
|
||
Interest expense, net
|
|
(6,478
|
)
|
|
(6,569
|
)
|
||
Income tax benefit
|
|
(58
|
)
|
|
502
|
|
||
Depreciation
|
|
(2,459
|
)
|
|
(1,931
|
)
|
||
Amortization of intangibles
|
|
(2,082
|
)
|
|
(879
|
)
|
||
Stock-based compensation expense
|
|
(1,973
|
)
|
|
(966
|
)
|
||
Acquisition and integration expenses
|
|
(4,623
|
)
|
|
(172
|
)
|
||
Restructuring and other expenses
|
|
(1,278
|
)
|
|
(387
|
)
|
||
Loss from continuing operations, net of income taxes
|
|
$
|
(7,470
|
)
|
|
$
|
(2,023
|
)
|
|
|
|
|
Three Months Ended
March 31,
|
|||||
|
|
|
|
2013
1, 3
|
|
2012
2, 4
|
|
||
|
|
|
|
|
|
|
|
||
Net loss from continuing operations, net of income taxes
|
|
(7,470
|
)
|
|
(2,023
|
)
|
|
||
|
Non-GAAP adjustments:
|
|
|
|
|
|
|||
|
|
Restructuring and other expenses
|
|
1,278
|
|
|
308
|
|
|
|
|
Acquisition and integration expenses
|
|
4,623
|
|
|
137
|
|
|
|
|
Amortization of intangibles
|
|
2,082
|
|
|
699
|
|
|
|
|
Stock-based compensation expense
|
|
1,973
|
|
|
769
|
|
|
Non-GAAP net income (loss) from continuing operations
|
|
2,486
|
|
|
(110
|
)
|
|
||
|
|
|
|
|
|
|
|
||
Loss per share from continuing operations, basic and diluted
|
|
(0.13
|
)
|
|
(0.04
|
)
|
|
||
|
Non-GAAP adjustments:
|
|
|
|
|
|
|||
|
|
Restructuring and other expenses
|
|
0.02
|
|
|
0.01
|
|
|
|
|
Acquisition and integration expenses
|
|
0.08
|
|
|
—
|
|
|
|
|
Amortization of intangibles
|
|
0.04
|
|
|
0.01
|
|
|
|
|
Stock-based compensation expense
|
|
0.03
|
|
|
0.02
|
|
|
Non-GAAP earnings (loss) per share from continuing operations, basic and diluted
|
|
0.04
|
|
|
—
|
|
|
||
|
|
|
|
|
|
|
|
||
Weighted average shares outstanding, basic
|
|
57,047
|
|
|
55,307
|
|
|
||
Weighted average shares outstanding, diluted
|
|
58,509
|
|
|
55,307
|
|
|
|
Payments Due in Period
|
||||||||||||||||||
Contractual Obligations
|
Total
|
|
Remainder 2013
|
|
2014-2015
|
|
2016-2017
|
|
After 2017
|
||||||||||
Long-term debt (1)
|
$
|
282,720
|
|
|
$
|
17,297
|
|
|
$
|
265,423
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease obligations
|
30,809
|
|
|
5,436
|
|
|
12,016
|
|
|
8,333
|
|
|
5,024
|
|
|||||
Capital lease obligations (1)
|
625
|
|
|
185
|
|
|
417
|
|
|
23
|
|
|
—
|
|
|||||
Purchase commitment
|
27,707
|
|
|
27,707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
341,861
|
|
|
$
|
50,625
|
|
|
$
|
277,856
|
|
|
$
|
8,356
|
|
|
$
|
5,024
|
|
(1)
|
Includes principal and interest payments.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit Number
|
Description
|
3.1
|
Second Amended and Restated Certificate of Incorporation of BioScrip, Inc. (Incorporated by reference to Exhibit 3.2 to the Company's Registration Statement on Form S-4 (File No. 333-119098) which became effective on January 26, 2005).
|
3.2
|
Amendment to the Second Amended and Restated Certificate of Incorporation of BioScrip, Inc. (Incorporated by reference to Exhibit 3.1 to the Company's current report on Form 8-K filed with the SEC on June 10, 2010, accession No. 0000950123-10-057214).
|
3.3
|
Amended and Restated By-Laws of BioScrip, Inc. (Incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the SEC on April 28, 2011, accession No. 0001014739-11-000012).
|
10.1
|
Amendment No. 1, dated as of March 8, 2013, by and between BioScrip, Inc. and Kohlberg Investors V, L.P., to the Stockholders' Agreement, dated as of January 24, 2010, by and among BioScrip, Inc., Kohlberg Investors V, L.P., Kohlberg Partners V, L.P., Kohlberg Offshore Investors V, L.P., Kohlberg TE Investors V, L.P., KOCO Investors V, L.P., Robert Cucuel, Mary Jane Graves, Nitin Patel, Joey Ryan, Colleen Lederer, Blackstone Mezzanine Partners II L.P., Blackstone Mezzanine Holdings II L.P., and S.A.C. Domestic Capital Funding, Ltd. (the “Stockholders' Agreement”).
|
10.2
|
Amendment No. 2, dated as of March 14, 2013, by and between BioScrip, Inc. and Kohlberg Investors V. L.P., to the Stockholders' Agreement.
|
31.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101 *
|
The following financial information from BioScrip, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Unaudited Consolidated Statements of Operations for the three months ended March 31, 2013 and 2012, (ii) Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012, (iii) Unaudited Consolidated Statements of Cash Flows for the three ended March 31, 2013 and 2012, and (iv) Notes to Unaudited Consolidated Financial Statements.
|
|
|
|
|
|
|
*
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.
|
BIOSCRIP INC.
|
|
/s/ Patricia Bogusz
|
Patricia Bogusz
|
Vice President of Finance
and Principal Accounting Officer
|
Title:
|
Senior Vice President and General Counsel
|
Title:
|
Senior Vice President, Secretary and General Counsel
|
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.
|