BioScrip Inc (NASDAQ:BIOS), which provides home infusions and home care management solutions, halved in value Tuesday after investors took a dim view of the company’s third quarter earnings report and the accompanying, diluted guidance. Never mind that the company’s CEO and President did some plain speaking on the conference call.
The stock closed at $1.36, down 47.89%, on volume of 7.79 million shares.
Technically, yesterday’s plunge brought BioScrip’s honeymoon with the 200-day average to an abrupt end. The stock gapped down and through the line and broke its previous low of $1.97. Only the long-term support line at $1.30 helped to avert a further collapse.
On the weekly chart, the stock is now positioned at the lower line (the same $1.30) of a long-term rectangle range, and a fall through that line will likely trigger further selling.
BioScrip Inc (NASDAQ:BIOS) shares feel the brunt of an earnings disappointment
For its third quarter BioScrip reported EPS of $-0.12 which missed by $0.07, and revenue of $224.54 million that beat estimates by $1.28 million, but was sharply down 9.2% year on year.
The reasons for the decline in sales were lower core sales volumes, as well as a shift (anticipated by the company) from lower-margin chronic-infusion revenue to more profitable core-infusion revenue.
Year over year consolidated Adjusted EBITDA decreased by $2.5 million due to lower than expected core sales volumes combined with higher than expected operating expenses during the third quarter of 2016.
“We do not believe our third quarter financial results are indicative of the financial capability of the company and what we will achieve going forward,” he added. “We have already implemented a number of cost reductions and performance changes at the Company in late September and October.”
Recently appointed President and Chief Executive Officer Daniel E. Greenleaf said in a statement it was clear from his review that “we have work ahead of us.” [Read more from Greenleaf below]
BioScrip Inc (NASDAQ:BIOS) lowers guidance
After a comprehensive review, the company has watered down the guidance it provided on August 8. The new guidance for full year 2016 is revenues in the range of $928 million to $934 million and adjusted EBITDA in the range of $27 million to $29 million.
For the full year 2017 the company expects revenues in the range of $940 million to $980 million and adjusted EBITDA in the range of $50 million to $60 million.
BioScrip Inc (NASDAQ:BIOS) CEO and President comes out swinging
In the conference call Dan Greenleaf, President, CEO, made some very blunt remarks:
I want to get a couple things out of the way before we get started today. One of those items is clearly the organization took its eye off the ball in the third quarter and those that are involved are no longer part of the organization in any shape or form.
I have inherited challenging business situations before and this is not the first time.
I have a significant personal stake in this organization… the success of the stock and the success of the Company and my success are intertwined.
The next 18 to 24 months will be a highly transformational period for BioScrip, perhaps the most transformational in the history of the Company.