UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 2, 2017

 

BIOSCRIP, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware		001-11993		05-0489664
(State of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

1600 Broadway, Suite 700, Denver, Colorado		80202
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (720) 697-5200

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 2, 2017, BioScrip, Inc. (the “Company”) issued a press release reporting its 2017 third quarter financial results. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

 

The press release includes certain non-GAAP financial measures as described therein. As required by Regulation G, reconciliation between any non-GAAP financial measures presented and the most directly comparable GAAP financial measures is also provided.

 

Item 8.01. Other Events.

 

As previously announced, the Company will host a conference call to discuss its 2017 third quarter financial results on November 2, 2017, at 9:00 a.m. Eastern Time. Interested parties may participate in the conference call by dialing (888) 372-9592 (U.S.) or by accessing a link on the Company’s website at www.bioscrip.com 5-10 minutes prior to the start of the call. A replay of the conference call will be available for two weeks after the call’s completion by dialing (855) 859-2056 (U.S.) and entering conference call ID number 1115410. An audio webcast and archive will also be available for 30 days under the “Investor Relations” section of the Company’s website.

 

Item 9.01. Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Press Release issued by the Company, dated November 2, 2017

 

As provided in General Instruction B.2 to Form 8-K, the information furnished in Item 2.02 and in Exhibit 99.1 hereto, as it relates to the Company’s financial results for the quarter ended September 30, 2017, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed incorporated by reference into any filing of the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly provided by specific reference in such filing.

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		BIOSCRIP, INC.
Date: November 2, 2017				/s/ Kathryn Stalmack
		By:		Kathryn Stalmack
				Senior Vice President, General Counsel and Secretary

 

 

Exhibit 99.1

 

 

BioScrip Reports Third Quarter 2017 Financial Results

 

-

Net revenue of $198.7 million, including core product mix of 75.0%, compared to 65.8% in the prior year

-

Net revenue and adjusted EBITDA reduced $10.0 million and $3.0 million, respectively, due to sales disruption from Hurricane Irma, Hurricane Harvey, and completion of the UnitedHealthcare contract transition

-

Net loss from continuing operations of $12.4 million, compared to $11.1 million in the prior year

-

Adjusted EBITDA of $13.0 million, more than three times the prior year, driven by a 590 basis point improvement in gross profit margin and a $4.8 million reduction in operating expenses

-

Operating cash use of $0.3 million, reflecting $15.8 million of interest, including $8.9 million of bi-annual bond interest payments, and $19.6 million of operational and working capital improvements over the prior year

-

Discontinued operations cash use of $5.6 million, inclusive of settlement payment accrued in the fourth quarter of 2016

-

Liquidity of $43.0 million, including $33.0 million of cash

-

Full year revenue guidance updated to $805 million to $810 million and full year adjusted EBITDA guidance updated to $42 million to $44 million

 

DENVER, CO, November 2, 2017 – BioScrip, Inc. (NASDAQ: BIOS) ("BioScrip" or the "Company"), the largest independent national provider of infusion and home care management solutions, today announced its third quarter 2017 financial results. For the third quarter, the Company reported revenue from continuing operations of $198.7 million, net loss from continuing operations of $12.4 million, and adjusted EBITDA of $13.0 million.

 

“BioScrip delivered adjusted EBITDA of $13.0 million during the third quarter of 2017, while completing the UnitedHealthcare contract transition and enduring disruption from both Hurricane Harvey and Hurricane Irma, which impacted 12 of our branches,” said Daniel E. Greenleaf, President and Chief Executive Officer. “I am extremely proud of the significant progress the team has made on the turnaround plan since I joined the company just over a year ago. The turnaround plan is on schedule, driven by success in our CORE initiatives which has driven much improved and sustainable profitability and cash flow. With the UnitedHealthcare contract transition complete, we look forward to Core revenue acceleration.”

 

 

2017 Guidance

 

The Company has updated its revenue guidance for the full year 2017 to a range of $805.0 million to $810.0 million, reflecting the disruption from the hurricanes and the UnitedHealthcare contract transition during the third quarter, and the resulting lower patient census to begin the fourth quarter. The Company has also updated its adjusted EBITDA guidance to a range of $42.0 million to $44.0 million for full-year 2017, reflecting the third quarter results and the impact of updated revenue guidance for 2017. The Company expects to incur restructuring expenses in a range of $11.5 million to $12.0 million in 2017.

 

Conference Call and Presentation

 

BioScrip will host a conference call and live webcast, November 2, 2017, at 9:00 a.m. Eastern Time, to discuss its third quarter 2017 financial results. Interested parties may participate by dialing 888-372-9592 (US) or by accessing a link under the "Investors" section on the Company's website at www.bioscrip.com.

 

A replay of the conference call will be available two hours after the call's completion by dialing 855-859-2056 (US) and entering conference call ID number 1115410. An audio webcast and archive will also be available two hours after the call’s completion under the “Investors" section of the Company's website.

 

About BioScrip, Inc.

 

BioScrip, Inc. is the largest independent national provider of infusion and home care management solutions, with approximately 2,200 teammates and nearly 80 service locations across the U.S. BioScrip partners with physicians, hospital systems, payors, pharmaceutical manufacturers and skilled nursing facilities to provide patients access to post-acute care services. BioScrip operates with a commitment to bring customer-focused pharmacy and related healthcare infusion therapy services into the home or alternate-site setting. By collaborating with the full spectrum of healthcare professionals and the patient, BioScrip provides cost-effective care that is driven by clinical excellence, customer service, and values that promote positive outcomes and an enhanced quality of life for those it serves.

 

Investor Contacts:

 

Stephen Deitsch	David Clair
Chief Financial Officer & Treasurer	ICR, Inc.
T: (720) 697-5200	T: (646) 277-1266
stephen.deitsch@bioscrip.com	david.clair@icrinc.com

 

 

Forward-Looking Statements – Safe Harbor

 

This press release includes statements that may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the statements regarding 2017 guidance, projections of certain measures of the Company's results of operations, projections of future levels of certain charges and expenses, expectations of Home Solutions cost synergies and incremental cost structure improvements and other statements regarding the Company's financial improvement plan and strategy and anticipated effects of the Cures Act and the UnitedHealthcare contract. You can identify these statements by the fact that they do not relate strictly to historical or current facts. In some cases, forward-looking statements can be identified by words such as "may," "should," "could," "anticipate," "estimate," "expect," "project," "outlook," "aim," "intend," "plan," "believe," "predict," "potential," "continue" or comparable terms. Because such statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied by such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors. Important factors that could cause actual results to differ materially from those in the forward-looking statement include but are not limited to risks associated with: the Company’s ability to successfully integrate the Home Solutions business into its existing businesses; the Company’s ability to grow its core Infusion revenues; the Company's ability to continue to execute its financial improvement plan to reduce operating costs and focus its business on its Infusion Services segment; the Company’s ability to evaluate opportunities for improvement and implement solutions as part of its strategic review process; the Company’s ability to comply with the covenants in its debt agreements or obtain amendments to such covenants; the UnitedHealthcare contract termination, including potential accounting charges and impacts on other contract provisions and their associated revenue; the success of the Company’s initiatives to mitigate the impact of the Cures Act on its business; reductions in federal, state and commercial reimbursement for the Company's products and services; increased government regulation related to the health care and insurance industries; as well as the risks described in the Company's periodic filings with the Securities and Exchange Commission. The Company does not undertake any duty to update these forward-looking statements after the date hereof, even though the Company's situation may change in the future. All of the forward-looking statements herein are qualified by these cautionary statements.

 

 

Note Regarding Use of Non-GAAP Financial Measures

 

In addition to reporting financial information in accordance with generally accepted accounting principles (GAAP), the Company is also reporting Adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be used in isolation or as a substitute or alternative to net income, operating income or any other performance measure derived in accordance with GAAP, or as a substitute or alternative to cash flow from operating activities or a measure of the Company’s liquidity. In addition, the Company's definition of Adjusted EBITDA may not be comparable to similarly titled non-GAAP financial measures reported by other companies. Adjusted EBITDA, as defined by the Company, represents net income before net interest expense, income tax expense, depreciation and amortization, impairment of goodwill, stock-based compensation expense, and restructuring, integration and other expenses. As part of restructuring, the Company may incur significant charges such as the write down of certain long−lived assets, temporary redundant expenses, retraining expenses, potential cash bonus payments and potential accelerated payments or terminated costs for certain of its contractual obligations. Management believes that Adjusted EBITDA provides useful supplemental information regarding the performance of BioScrip’s business operations and facilitates comparisons to the Company’s historical operating results. For a full reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, please see the attachment to this earnings release.

 

 

Schedule 1
BIOSCRIP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except for share amounts)
(unaudited)
		September 30, 2017				December 31, 2016
ASSETS
Current assets
Cash and cash equivalents		$	33,013			$	9,569
Restricted cash			4,950				-
Receivables, less allowance for doubtful accounts of $46,820 and $44,730
as of September 30, 2017 and December 31, 2016, respectively			89,215				111,811
Inventory			27,775				36,165
Prepaid expenses and other current assets			15,222				18,507
Total current assets			170,175				176,052
Property and equipment, net			28,726				32,535
Goodwill			367,198				365,947
Intangible assets, net			21,734				31,043
Other non-current assets			2,415				2,163
Total assets		$	590,248			$	607,740
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current portion of long-term debt		$	1,828			$	18,521
Accounts payable			42,691				59,134
Amounts due to plan sponsors			4,890				3,799
Accrued interest			3,198				6,705
Accrued expenses and other current liabilities			36,419				42,191
Total current liabilities			89,026				130,350
Long-term debt, net of current portion			476,753				433,413
Deferred taxes			4,150				2,281
Other non-current liabilities			18,879				1,257
Total liabilities			588,808				567,301
Series A convertible preferred stock, $.0001 par value; 825,000 shares authorized;
21,645 shares issued and outstanding as of September 30, 2017 and December 31, 2016;
and $2,833 and $2,603 liquidation preference as of September 30, 2017 and
December 31, 2016, respectively			2,732				2,462
Series C convertible preferred stock, $.0001 par value; 625,000 shares authorized;
614,177 shares issued and outstanding as of September 30, 2017 and December 31, 2016;
and $82,173 and $75,491 liquidation preference as of September 30, 2017 and
December 31, 2016, respectively			76,706				69,540
Stockholders' (deficit) equity
Preferred stock, $.0001 par value; 5,000,000 shares authorized; no shares issued and
outstanding as of September 30, 2017 and December 31, 2016, respectively			-				-
Common stock, $.0001 par value; 250,000,000 shares authorized; 127,520,628 and
117,682,543 shares issued and outstanding as of September 30, 2017 and
December 31, 2016, respectively			13				12
Treasury stock, 5,106 and no shares outstanding as of September 30, 2017 and
December 31, 2016, respectively			(16	)			-
Additional paid-in capital			626,567				611,844
Accumulated deficit			(704,562	)			(643,419	)
Total stockholders' deficit			(77,998	)			(31,563	)
Total liabilities and stockholders' deficit		$	590,248			$	607,740

 

 

Schedule 2
BIOSCRIP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
		Three Months Ended September 30,								Nine Months Ending September 30,
		2017				2016				2017				2016
Net revenue		$	198,692			$	224,542			$	634,608			$	695,466
Cost of revenue (excluding depreciation expense)			131,516				161,957				433,538				504,485
Gross profit			67,176				62,585				201,070				190,981
% of revenues			33.8	%			27.9	%			31.7	%			27.5	%
Other operating expenses			38,325				42,729				125,169				123,006
Bad debt expense			6,600				7,727				19,987				19,598
General and administrative expenses			9,784				9,948				29,287				30,413
Restructuring, acquisition, integration, and other expenses, net			4,037				2,368				11,171				9,326
Change in fair value of equity linked liabilities			1,080				-				1,080				-
Depreciation and amortization expense			6,552				4,166				20,329				12,956
Interest expense			13,175				9,331				38,635				28,212
Loss on extinguishment of debt			-				-				13,453				-
(Gain) loss on dispositions			(33	)			(3,015	)			652				(3,954	)
Loss from continuing operations,  before income taxes			(12,344	)			(10,669	)			(58,693	)			(28,576	)
Income tax expense			60				421				1,397				593
Loss from continuing operations, net of income taxes			(12,404	)			(11,090	)			(60,090	)			(29,169	)
(Loss) income from discontinued operations, net of income taxes			(113	)			(174	)			(1,053	)			134
Net loss		$	(12,517	)		$	(11,264	)		$	(61,143	)		$	(29,035	)
Accrued dividends on preferred stock			(2,394	)			(2,138	)			(6,911	)			(6,192	)
Deemed dividend on preferred stock			(175	)			(173	)			(525	)			(518	)
Loss attributable to common stockholders		$	(15,086	)		$	(13,575	)		$	(68,579	)		$	(35,745	)
Denominator - Basic and Diluted:
Weighted average number of common shares outstanding			127,488				114,826				122,519				85,701
Loss from continuing operations, basic and diluted		$	(0.12	)		$	(0.12	)		$	(0.55	)		$	(0.42	)
Income from discontinued operations, basic and diluted			-				-				(0.01	)			-
Loss per common share, basic and diluted		$	(0.12	)		$	(0.12	)		$	(0.56	)		$	(0.42	)

 

 

Schedule 3
BIOSCRIP, INC. AND SUBSIDIARIES
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES
(in thousands)
		Three Months Ended								Nine Months Ended
		9/30/2017				9/30/2016				9/30/2017				9/30/2016
Loss from continuing operations, net of income taxes			(12,404	)			(11,090	)			(60,090	)			(29,169	)
Interest expense			(13,175	)			(9,331	)			(38,635	)			(28,212	)
Change in fair value of equity linked liabilities			(1,080	)			-				(1,080	)			-
Gain (loss) on dispositions			33				3,015				(652	)			3,954
Loss on extinguishment of debt			-				-				(13,453	)			-
Income tax expense			(60	)			(421	)			(1,397	)			(593	)
Depreciation and amortization expense			(6,552	)			(4,166	)			(20,329	)			(12,956	)
Stock-based compensation expense			(545	)			(1,358	)			(1,573	)			(3,347	)
Restructuring, acquisition, integration, and other expenses, net (1)			(4,037	)			(2,368	)			(11,171	)			(9,326	)
Consolidated Adjusted EBITDA		$	13,012			$	3,539			$	28,200			$	21,311

 

(1) Restructuring, acquisition, integration and other expenses, net include costs associated with restructuring, acquisition, and integration initiatives such as employee severance costs, certain legal and professional fees, redundant wage costs, impacts recorded from the change in contingent consideration obligations, and other costs related to contract terminations and closed locations.                                

 

 

Schedule 4

BIOSCRIP, INC AND SUBSIDIARIES

CONSOLIDATED CONDENSED CASH FLOWS

(in thousands)

(unaudited)

 

		Three Months Ended												Nine Months Ended				Three Months Ended												Nine Months Ended
		3/31/2017				6/30/2017				9/30/2017				9/30/2017				3/31/2016				6/30/2016				9/30/2016				9/30/2016
Cash flows from operating activities:
Net loss from continuing operations		$	(18,991	)		$	(28,695	)		$	(12,404	)		$	(60,090	)		$	(9,770	)		$	(8,309	)		$	(11,090	)		$	(29,169	)
Receivables, net of bad debt expense			2,333				6,388				13,875				22,596				(4,417	)			3,136				8,001				6,720
Inventory			5,616				1,727				(346	)			6,997				13,867				(3,330	)			2,265				12,802
Prepaid expenses and other assets			3,601				1,868				(2,436	)			3,033				7,897				(7,575	)			8,839				9,161
Accounts payable			(11,688	)			(1,065	)			(4,539	)			(17,292	)			(11,995	)			(4,195	)			(15,058	)			(31,248	)
Accrued interest			(1,157	)			1,188				(3,538	)			(3,507	)			(4,630	)			4,438				(4,437	)			(4,629	)
Accrued expenses and other liabilities			244				1,497				(1,389	)			352				(2,227	)			(851	)			(4,302	)			(7,380	)
Non-Cash Adjustments:
Depreciation and amortization			6,988				6,789				6,552				20,329				4,538				4,252				4,166				12,956
Loss on extinguishment of debt			-				13,453				-				13,453				-				-				-				-
Deferred taxes			619				604				646				1,869				174				178				184				536
Other Non-Cash			1,839				2,748				3,330				7,917				1,589				1,554				(5,342	)			(2,199	)
Operating Cash Flow (Use)			(10,596	)			6,502				(249	)			(4,343	)			(4,974	)			(10,702	)			(16,774	)			(32,450	)
Discontinued operations			(437	)			(503	)			(5,613	)			(6,553	)			(5,989	)			76				(175	)			(6,088	)
Cash consideration paid for acquisition			-				-				-				-				-				-				(67,516	)			(67,516	)
Capital expenditures			(1,684	)			(2,608	)			(753	)			(5,045	)			(2,429	)			(3,037	)			(2,578	)			(8,044	)
Investment in restricted cash			(5,132	)			77				105				(4,950	)			-				27				(27	)			-
Proceeds from dispositions			-				-				-				-				1,105				-				3,072				4,177
Proceeds from equity offering, net			-				-				-				-				-				83,267				-				83,267
Proceeds from priming credit agreement, net of expenses			23,060				-				-				23,060				-				-				-				-
Fees attributable to extinguishment of debt			-				(311	)			(669	)			(980	)			-				-				-				-
Net proceeds from equity issuance, net of issuance costs			5,052				15,724				-				20,776				-				-				-				-
Proceeds from borrowing on long-term debt			563				293,883				-				294,446				-				-				-				-
Principal payments of long-term debt			(3,137	)			(233,633	)			-				(236,770	)			(3,137	)			(3,137	)			(3,137	)			(9,411	)
Revolver borrowings (repayments)			(1,000	)			(54,300	)			-				(55,300	)			8,000				(23,000	)			39,000				24,000
Other			(289	)			(267	)			(341	)			(897	)			(104	)			(118	)			(455	)			(677	)
Total All Cash Flow		$	6,400			$	24,564			$	(7,520	)		$	23,444			$	(7,528	)		$	43,376			$	(48,590	)		$	(12,742	)

 

 

Schedule 5
BIOSCRIP, INC AND SUBSIDIARIES
FULL YEAR 2017 GUIDANCE
(dollars in millions, except EPS)

 

		Low End				High End
		of Range				of Range
Revenues		$	805.0			$	810.0
Net Loss - Continuing Ops			(78.9	)			(71.4	)
Preferred Stock Dividends			9.4				9.4
Income Tax Expense			3.0				2.0
Loss on Extinguishment of Debt			13.5				13.5
Change in Fair Value of Equity Linked Liabilities			2.5				2.0
Restructuring Costs			12.0				11.5
Interest Expense, net			53.0				52.0
Depreciation & Amortization			27.0				25.0
Stock Compensation			2.5				2.0
Adjusted EBITDA		$	44.0			$	46.0
adjusted ebitda margin			4.9	%			5.8	%
Diluted Loss Per Common Share		$	(0.64	)		$	(0.58	)
weighted-average diluted shares			123,000				123,000

 

 

Schedule 6
BIOSCRIP, INC. AND SUBSIDIARIES
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
		Three Months Ended												Nine Months Ended
		3/31/2017				6/30/2017				9/30/2017				9/30/2017
Net revenue		$	217,810			$	218,106			$	198,692			$	634,608
Cost of revenue (excluding depreciation expense)			152,226				149,796				131,516				433,538
Gross profit			65,584				68,310				67,176				201,070
% of revenues			30.1	%			31.3	%			33.8	%			31.7	%
Other operating expenses			44,358				42,486				38,325				125,169
Bad debt expense			7,164				6,223				6,600				19,987
General and administrative expenses			9,478				10,025				9,784				29,287
Restructuring, acquisition, integration, and other expenses, net			3,223				3,911				4,037				11,171
Change in fair value of equity linked liabilities			-				-				1,080				1,080
Depreciation and amortization expense			6,988				6,789				6,552				20,329
Interest expense, net			12,745				12,715				13,175				38,635
Loss on extinguishment of debt			-				13,453				-				13,453
Loss on dispositions			-				685				(33	)			652
Loss from continuing operations,  before income taxes			(18,372	)			(27,977	)			(12,344	)			(58,693	)
Income tax expense			619				718				60				1,397
Loss from continuing operations, net of income taxes			(18,991	)			(28,695	)			(12,404	)			(60,090	)
Loss from discontinued operations, net of income taxes			(437	)			(503	)			(113	)			(1,053	)
Net loss		$	(19,428	)		$	(29,198	)		$	(12,517	)		$	(61,143	)
Accrued dividends on preferred stock			(2,214	)			(2,303	)			(2,394	)			(6,911	)
Deemed dividends on preferred stock			(175	)			(175	)			(175	)			(525	)
Loss attributable to common stockholders		$	(21,817	)		$	(31,676	)		$	(15,086	)		$	(68,579	)
Loss per common share:
Denominator - Basic and Diluted:
Weighted average number of common shares outstanding			118,783				121,189				127,488				122,519
Loss from continuing operations, basic and diluted		$	(0.18	)		$	(0.26	)		$	(0.12	)		$	(0.55	)
Income from discontinued operations, basic and diluted			-				-				-				(0.01	)
Net loss per common share, basic and diluted		$	(0.18	)		$	(0.26	)		$	(0.12	)		$	(0.56	)

 

Schedule 7

BIOSCRIP, INC. AND SUBSIDIARIES

QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

		Three Months Ended																Twelve Months Ended
		3/31/2016				6/30/2016				9/30/2016				12/31/2016				12/31/2016
Net revenue		$	238,462			$	232,462			$	224,542			$	240,123			$	935,589
Cost of revenue (excluding depreciation expense)			174,230				168,298				161,957				165,473				669,958
Gross profit			64,232				64,164				62,585				74,650				265,631
% of revenues			26.9	%			27.6	%			27.9	%			31.1	%			28.4	%
Other operating expenses			39,658				40,619				42,729				47,712				170,718
Bad debt expense			7,592				4,279				7,727				7,201				26,799
General and administrative expenses			11,051				9,414				9,948				8,812				39,225
Change in fair value of equity linked liabilities			-				-				-				(10,450	)			(10,450	)
Restructuring, acquisition, integration, and other expenses, net			2,667				4,291				2,368				6,533				15,859
Depreciation and amortization expense			4,538				4,252				4,166				8,595				21,551
Interest expense, net			9,412				9,469				9,331				10,023				38,235
(Gain) on dispositions			(939	)			-				(3,015	)			-				(3,954	)
Loss from continuing operations,  before income taxes			(9,747	)			(8,160	)			(10,669	)			(3,776	)			(32,352	)
Income tax expense			23				149				421				1,422				2,015
Loss from continuing operations, net of income taxes			(9,770	)			(8,309	)			(11,090	)			(5,198	)			(34,367	)
Income (loss) from discontinued operations, net of income taxes			233				75				(174	)			(7,273	)			(7,139	)
Net loss		$	(9,537	)		$	(8,234	)		$	(11,264	)		$	(12,471	)		$	(41,506	)
Accrued dividends on preferred stock			(1,998	)			(2,056	)			(2,138	)			(2,200	)			(8,392	)
Deemed dividends on preferred stock			(172	)			(173	)			(173	)			(174	)			(692	)
Loss attributable to common stockholders		$	(11,707	)		$	(10,463	)		$	(13,575	)		$	(14,845	)		$	(50,590	)
Loss per common share:
Denominator - Basic and Diluted:
Weighted average number of common shares outstanding			68,771				73,186				114,826				117,683				93,740
Loss from continuing operations, basic and diluted		$	(0.17	)		$	(0.14	)		$	(0.12	)		$	(0.06	)		$	(0.46	)
Income from discontinued operations, basic and diluted			-				-				-				(0.06	)			(0.08	)
Net loss per common share, basic and diluted		$	(0.17	)		$	(0.14	)		$	(0.12	)		$	(0.12	)		$	(0.54	)