ELMSFORD, N.Y. — Pharmacy services fueled an uptick in revenue in the third quarter at BioScrip Inc.
The company said Tuesday that for the third quarter ended Sept. 30, total revenue was up 2.9% to $454 million from $441.2 million a year earlier.
Pharmacy services sales in the quarter came in at $344.5 million, a 4.6% gain from $329.3 million a year ago. That was diluted, however, by a 2.1% decrease in infusion/home health services revenue to $109.6 million from $111.8 in the prior-year period.
During the 2011 third quarter, BioScrip generated $25.8 million of segment adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), or 5.7% of total revenue, versus $25.7 million, or 5.8% of total revenue, a year earlier.
The pharmacy services segment posted $15.4 million of segment adjusted EBITDA, or 4.5% of segment revenue, up from $10.7 million, or 3.3% of segment revenue, a year earlier. BioScrip attributed the gain in pharmacy services segment adjusted EBITDA to growth in discount cash-card program volumes; new managed care contracts, growth in oncology, arthritis and multiple sclerosis therapies; and industrywide drug inflation. In addition, the pharmacy services unit reduced its bad debt expense.
Meanwhile, the infusion/home health segment turned in $10.5 million of adjusted EBITDA, or 9.6% of segment revenue, down from $14.9 million, or 13.4% of segment revenue, a year ago.
On a consolidated basis, BioScrip reported $19 million of adjusted EBITDA for the 2011 third quarter or 4.2% of total revenue, up slightly from $18.1 million, or 4.1% of total revenue, in the year-ago period.
Net income for the third quarter was $0.5 million, or 1 cent per diluted share, compared with $2 million, or 4 cents per diluted share, a year earlier. BioScrip noted that excluding the after-tax effect of the restructuring charges, severance and other employee costs, net income was $5.7 million, or 10 cents per diluted share.
"In the third quarter, we generated $19 million in adjusted EBITDA and continued to grow patient census through our local referral sources and expanded managed care relationships in both our pharmacy services and infusion/home health services segments," BioScrip president and chief executive officer Rick Smith said in a statement. "We achieved a 2.9% increase in year-over-year revenue, replaced $19 million of discontinued revenue included in Q3 2010, and maintained our gross margin. Overall growth occurred in spite of a challenging economic environment impacting demand for services, lower acuity levels, shifts in reimbursement rates, and other short-term trends impacting companies industry wide. The diversification that we have in our payor mix has enabled us to keep making forward progress.
"While we have more work ahead of us," Smith added, "the current quarter’s results reflect progress from our efforts over the last year."
BioScrip provides retail pharmacy and specialty pharmacy services along with pharmacy benefit management, home infusion and other health care services. It operates a network of 32 community retail pharmacies in 16 states and the District of Columbia.
