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BioScrip (BIOS): Q4 Loss Narrower than Expected, Sales Top
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BioScrip, Inc. reported net loss from continuing operations of $5.2 million or loss of 6 cents per share in the fourth quarter of 2016, much narrower than the year-ago net loss of $16.9 million or loss of 28 cents. The Zacks Consensus Estimate for the quarter was a loss of 8 cents.
For full-year 2016, the company reported net loss from continuing operations of $34.4 million and loss of 46 cents per share, much narrower than the prior-year net loss of $303.4 million or loss of $4.56.
Revenues
With the completion of the company’s non-core PBM business divestment (treated as discontinued operation in the previous quarter), BioScrip currently has a simplified business structure focused on core Infusion Services.
Revenues from continuing operations in the fourth quarter fell 1.5% year over year to $240.1 million but exceeded the Zacks Consensus Estimate of $235 million. The year-over-year decline was due to the ongoing favorable shift in revenue mix to a greater percentage of core revenue and less lower-margin non-core revenues in the reported quarter.
For full-year 2016, revenues from continuing operations fell 4.7% year over year to $935.6 million.
Gross profit during the fourth quarter was $74.6 million, up 13.3% year over year. Gross margin also expanded 405 basis points (bps) to 31.1% as a result of the improved revenue mix on a year-over-year basis. Adjusted operating income was $65.8 million, marking a 17% rise from the year-ago adjusted number of $56.3 million due to an 8.7% fall in adjusted operating expenses to $8.8 million. Adjusted operating margin expanded 434 bps year over year to 27.4%.
Financials
BioScrip exited fiscal 2016 with cash and cash equivalents of $9.5 million, significantly down from $15.5 million in the prior fiscal.
2017 Guidance
Management issued guidance for full-year 2017 which includes the estimated adverse impact of the Cures Act legislation.The Cures Act legislation results in a significant reduction in Medicare reimbursement rates on certain drugs effective Jan 1, 2017 and does not reimburse any service payments for the administration of these drugs to patients via home infusion pharmacies. Full-year 2017 revenues are expected in the range of $920.0 million to $950.0 million. The Zacks Consensus Estimate for full-year revenue is $952.6 million.
The company has also projected adjusted EBITDA in the range of $45.0 million to $55.0 million.
Our Take
BioScrip exited the fourth quarter of 2016 with a sales beat. Also, net loss was way narrower than the year-ago figure. However, a year-over-year drop in revenues, partly due to lower-than-expected core sales volumes, raises caution. Management’s 2017 guidance, which includes the negative impact of Cures Act legislation, also adds to our concerns.
Nonetheless, we are encouraged by the company’s progress in the fourth quarter, courtesy of its new multi-faceted CORE plan which was adopted to improve its financial position. Further, the recent integration of Home Solutions is expected to boost BioScrip’s focus on its core business. The company expects core revenues at Home Solutions and continued core growth to prove accretive going forward.
Zacks Rank & Key Picks
BioScrip currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the medical product sector are Inogen, Inc. (INGN - Free Report) , Bovie Medical Corporation and Neogen Corp. (NEOG - Free Report) . Inogen carries a Zacks Rank #1 (strong Buy while other two stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained over 100% in the last one year in comparison to the S&P 500’s gain of 19.5%. The company has a stellar four-quarter average earnings surprise of over 49.08%.
Bovie Medical surged 76.5% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 28.7%.
Neogen gained 24.3% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared to the industry average of 15.2%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
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BioScrip (BIOS): Q4 Loss Narrower than Expected, Sales Top
BioScrip, Inc. reported net loss from continuing operations of $5.2 million or loss of 6 cents per share in the fourth quarter of 2016, much narrower than the year-ago net loss of $16.9 million or loss of 28 cents. The Zacks Consensus Estimate for the quarter was a loss of 8 cents.
For full-year 2016, the company reported net loss from continuing operations of $34.4 million and loss of 46 cents per share, much narrower than the prior-year net loss of $303.4 million or loss of $4.56.
Revenues
With the completion of the company’s non-core PBM business divestment (treated as discontinued operation in the previous quarter), BioScrip currently has a simplified business structure focused on core Infusion Services.
BioScrip, Inc. Price, Consensus and EPS Surprise
BioScrip, Inc. Price, Consensus and EPS Surprise | BioScrip, Inc. Quote
Revenues from continuing operations in the fourth quarter fell 1.5% year over year to $240.1 million but exceeded the Zacks Consensus Estimate of $235 million. The year-over-year decline was due to the ongoing favorable shift in revenue mix to a greater percentage of core revenue and less lower-margin non-core revenues in the reported quarter.
For full-year 2016, revenues from continuing operations fell 4.7% year over year to $935.6 million.
Gross profit during the fourth quarter was $74.6 million, up 13.3% year over year. Gross margin also expanded 405 basis points (bps) to 31.1% as a result of the improved revenue mix on a year-over-year basis. Adjusted operating income was $65.8 million, marking a 17% rise from the year-ago adjusted number of $56.3 million due to an 8.7% fall in adjusted operating expenses to $8.8 million. Adjusted operating margin expanded 434 bps year over year to 27.4%.
Financials
BioScrip exited fiscal 2016 with cash and cash equivalents of $9.5 million, significantly down from $15.5 million in the prior fiscal.
2017 Guidance
Management issued guidance for full-year 2017 which includes the estimated adverse impact of the Cures Act legislation.The Cures Act legislation results in a significant reduction in Medicare reimbursement rates on certain drugs effective Jan 1, 2017 and does not reimburse any service payments for the administration of these drugs to patients via home infusion pharmacies. Full-year 2017 revenues are expected in the range of $920.0 million to $950.0 million. The Zacks Consensus Estimate for full-year revenue is $952.6 million.
The company has also projected adjusted EBITDA in the range of $45.0 million to $55.0 million.
Our Take
BioScrip exited the fourth quarter of 2016 with a sales beat. Also, net loss was way narrower than the year-ago figure. However, a year-over-year drop in revenues, partly due to lower-than-expected core sales volumes, raises caution. Management’s 2017 guidance, which includes the negative impact of Cures Act legislation, also adds to our concerns.
Nonetheless, we are encouraged by the company’s progress in the fourth quarter, courtesy of its new multi-faceted CORE plan which was adopted to improve its financial position. Further, the recent integration of Home Solutions is expected to boost BioScrip’s focus on its core business. The company expects core revenues at Home Solutions and continued core growth to prove accretive going forward.
Zacks Rank & Key Picks
BioScrip currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the medical product sector are Inogen, Inc. (INGN - Free Report) , Bovie Medical Corporation and Neogen Corp. (NEOG - Free Report) . Inogen carries a Zacks Rank #1 (strong Buy while other two stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained over 100% in the last one year in comparison to the S&P 500’s gain of 19.5%. The company has a stellar four-quarter average earnings surprise of over 49.08%.
Bovie Medical surged 76.5% in the last one year in comparison to the S&P 500. It has a four-quarter average earnings surprise of 28.7%.
Neogen gained 24.3% in the past one year, better than the S&P 500 mark. The stock has an impressive long-term earnings growth rate of 16.7% for the next five years compared to the industry average of 15.2%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>