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BioScrip Inc. Message Board

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  • I want to see how the price holds up in the face of tax loss selling. I bought some shares in the $9 area and bought some five weeks ago below $6 so that I can sell the pricier shares, take the loss and keep the cheaper ones. I assume the company took the big hit in write-offs last quarter so that they could show better numbers in the next year.

    Good luck.

  • How can you be down when the market goes up 421 today ? This has to be a sell?

  • Reply to

    Tight cash position...

    by buyacramer Nov 11, 2014 8:18 AM

    agree: not exact apps to apps but compare to say HOLX (my pick) - it trades 10+% op CF yield, about 9x adj EBITDA, 13 PE, leverage coming down ~4, margins improving. Generates tons of FCF and the worst is behind them - maybe not as much growth potential as BIOS but the inflection is here....g/l

  • Reply to

    Tight cash position...

    by buyacramer Nov 11, 2014 8:18 AM

    Right, this isnt as compelling of a value play if you factor in the heavy debt they have. Enterprise value is $800M+. With the tight liquidity situation, I don't see any reason to own them now at these prices. Even if they were to get bought out, there isnt compelling upside for equity holders given the debt that needs to be repaid. Now if they can pay down debt substantially, improve revenue as well as margins, then we could see some upside to the equity holders, but they still need to prove themselves capable of accomplishing that, which is at least a couple quarters away. Might be worth betting on Q2 2015 earnings in hopes things are turning, but cant see why BIOS would materially run now.

  • Reply to

    BIOS a Buy and going back to teens...

    by jfrancisofsi Nov 5, 2014 5:34 PM

    that's what everyone said about all the "smart" guys in the oil and gas plays that are getting crushed..

  • Reply to

    Tight cash position...

    by buyacramer Nov 11, 2014 8:18 AM

    they really can't tap their credit line as they have to stay below the 25% used threshold to avoid covenants triggering especially when those covenant levels revert in 1Q15. To me a rights offering is a decent idea giving current investors (gabelli n oscar) the opportunity to add. certainly one to watch

  • Reply to

    Tight cash position...

    by buyacramer Nov 11, 2014 8:18 AM

    not sure I agree on a that...i think they shud be able to generate some cash in Q4 - maybe enough to pay off credit line but much depends on their ability to push through the 15mn in cost savings next year. They were calling for 60mn in ebitda for 2014 as recently as last quarter - it was obvious back then that that was a serious reach. Now it looks like 45mn is probable. They are guestimating $60mn for 2015 but I take that with a bit of salt. Let's say 50mn - interest alone is 40mn. Covenants don't come into play until they borrow $19mn but the leverage ratios decline starting 1Q15. My own feeling is this would be valued at 11x forward ebitda if it had half its current debt so (11x50-210)/69 or ~= $5/share.

  • Reply to

    Tight cash position...

    by buyacramer Nov 11, 2014 8:18 AM

    Agreed, and with interest expense on a $400-$500M debt balance, the interest expense is going to consume most of that EBITDA. This also means they dont have much room for capital expenditures without tapping more debt or in the worst case doing a dilutive equity raise.

  • Reply to

    Tight cash position...

    by buyacramer Nov 11, 2014 8:18 AM

    It seems to me the tight cash position is a one time event, kind of like using all your cash to pay off your house.
    Cash flow seems to be growing rapidly largely because of their infusion business. This quarter was a one time blip and has provided this buying opportunity. I think we will see this much higher by Christmas and in a few quarters into the double digits. That is why I believe Gabelli and other smart managers increase their positions just a few weeks ago. Here is a quote from the press release:

    "As a result of the continued focus on cash collections, the Company has increased monthly average accounts receivable collections from $80.9 million in the second quarter of 2014 to $83.5 million in the third quarter of 2014.
    "The infusion business, once again, delivered double-digit organic revenue growth, underscoring our progress to be a leading provider of infusion services," said Rick Smith, President and Chief Executive Officer of BioScrip. "Our operating metrics are strong and continue to improve in key areas that are leading to sequential increases in operating cash flow. Our acquisitions over the last two years are integrated and we have created a national platform that is clinically respected and we believe it is strategically positioned to continue to grow and build on the foundation that has been established. We are focused on delivering value for shareholders."

  • Reply to

    Tight cash position...

    by buyacramer Nov 11, 2014 8:18 AM

    i noticed they dropped their adj-EBITDA guidance (55-60) - they've got 31mn for Q1-3; maybe another 15 in seasonally strong Q4 gets u to 45mn adj-EBITDA for the year (tops)....leverage high - does it break the covenant or did they ammend? i agree - not a lot of room to wiggle.

  • What concerns me is these guys are spreading themselves really thin. They have no cash and have tapped their revolver as a lifeline. Further, they have $425M in debt, where the interest expense alone is going to be tough to swallow. It appears to me the company doesnt have much wiggle room for any additional integration expenses or hiccups without a high risk of running into cash issues.

    I took my losses and will sit on the sidelines for the time being until I can get comfort of an inflection point and potential liquidity problems are removed. I've seen other companies in these situations and if there are further "hiccups", the company ends up issuing additional shares as they've maxed out their ability to take on debt.

  • What percentage of BIOS business is from PBM and are they selling that portion to focus more on the high growth infusion business?

  • Reply to

    BIOS a Buy and going back to teens...

    by jfrancisofsi Nov 5, 2014 5:34 PM

    It is the time to buy at the low now.

    Sentiment: Buy

  • Reply to

    BIOS a Buy and going back to teens...

    by jfrancisofsi Nov 5, 2014 5:34 PM

    sjampolis, thanks for your comments since you are in the business.. the broker who recommended this stock to me is very demanding of competent management and one of his points was this company is well managed. He, like Gabelli, finds this to be a well run company with huge growth potential in a health care area that is growing rapidly and the company is basically selling at book value. The real investment opportuniites in my mind come along when a stock is unfairly beaten into the ground and it becomes an incredible value. Like mpackard38, I'll take a position and hold it for a year for a 50-100% upside. As mentioned in the conference call, the reason this company was beaten up is behind them now. Their business is growing rapidly, and the next quarter or two might take right back up into the teens.

  • Reply to

    BIOS a Buy and going back to teens...

    by jfrancisofsi Nov 5, 2014 5:34 PM

    Good comments, I'm not in this biz so good to hear from someone who is. The only reason I invested, and I don't always do this, is because Mario Gabelli was buying more. His team of researchers is well aware of what BIOS has to offer and they are paying well over $7/share for this company so they see some bright things in the future for these guys. While what you say is likely true and management must not be so good, Gabelli doesn't invest in companies with bad management usually so he and his team must see lots of strengths that maybe you and I don't see. I would never recommend a stock for anybody as I don't know them or their situation but for me, this is a solid investment at around $6.50, what it does in the next 6-12 months isn't concerning, I'll try to stay nimble and get out if Gabelli does (although will likely miss the exact date) but I think he's in for a couple years at least. They don't come much smarter than Gabelli...

  • Reply to

    BIOS a Buy and going back to teens...

    by jfrancisofsi Nov 5, 2014 5:34 PM

    I think your assumptions using business models are good on paper. This company is poorly managed and regardless of what the models show, the ability to carry out and execute on a sound business model is what determines a companies performance. Over the last 5 years, BIOS has continually demonstrated, regardless of the model used, that management is not capable of implementing in a competent manner their business strategy. I am in their business niche and I see first hand all of their continued miscues. Healthcare is difficult at best and you need to be functioning at the top of your game to be successful. Look back several years to how BIOS handled the fiasco with Tenn Care...they lost over 100 million dollars. There is a reason that well managed companies like Walgreen's, CVS and Coram have not bought them. You should look at a sounder platform to invest your hard earned money.

  • Reply to

    BIOS is oversold...

    by jfrancisofsi Nov 6, 2014 3:23 PM

    The pharmacy and home health services provider reported a non-GAAP net loss from continuing operations for the 2014 third quarter of $28.3 million, or a loss of 42 cents per share, compared to net income of $1.6 million, or 1 cent per share in the prior year period.

    The company incurred a charge in the third quarter of $23.1 million in its Infusion segment for bad debt and contractual reserves that represents the amount above the segment's historical experience prior to the disruption from the acquisition of the HomeChoice and CarePoint businesses.

    "These disruptions are essentially behind us," CEO Rick Smith said in the earnings conference call.

    Additionally, total revenue for the third quarter was $244 million, compared to $190.6 million for the same period a year ago.

  • I think the selling is a little overdone today... but hey, I called it wrong yesterday. It just seems like Bios is getting a little too beat up today... jmho

  • Reply to

    BIOS a Buy and going back to teens...

    by jfrancisofsi Nov 5, 2014 5:34 PM

    Good thoughts buyacramer... well, I am in it for the next few quarters... bought in a little too soon with this mornings down draft but will hold because I believe it will head back to the teens eventually when they get their concerns addressed... I may double down but not sure where. Where do you think we'll bottom?

BIOS
6.52+0.15(+2.35%)Dec 26 4:00 PMEST

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