Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the BioScrip First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Wednesday, May 9, 2012. I would now like to turn the conference over to Lisa Wilson, Investor Relations for BioScrip.

Good morning, and thank you for joining us today. By now you should have received a copy of our press release issued this morning. If you have not received it, you may access it through the Investor Relations section at our website. Rick Smith, President and Chief Executive Officer and MJ Graves, Interim Chief Financial Officer and Treasurer, will host this morning's call. The call may be accessed through our website at bioscrip.com. A replay will be available shortly after the call. Interested parties can access the replay by dialing (800) 633-8284 in the U.S. and (402) 977-9140 internationally and entering access code 21590255. An audio webcast will also be available under the Investor Relations section of the BioScrip website at bioscrip.com. Before we get started, I would like to remind everyone that any statements made on the call today or in our press release that express a belief, expectation or intent, as well as those that are historical facts are considered forward-looking statements and are protected under the Safe Harbor of the Private Securities Litigation and Reform Act. These forward-looking statements are based on information available to BioScrip today, and the company assumes no obligation to update statements as circumstances change. These forward-looking statements may involve a number of risks and uncertainties, which may cause the company's results to differ materially from such statements. Important factors that could cause such differences include the failure to realize annualized cost savings associated with any restructuring or cost reduction efforts, the ability of members of management to execute these efforts, the company's ability to leverage core competencies or maximize margin and operating cash flow and the company's ability to grow its Infusion segment organically or through acquisitions, as well as the risks described in the company's periodic filings with the Securities and Exchange Commission including BioScrip's annual report on Form 10-K for the year ended December 31, 2011. During this presentation, we will refer to non-GAAP financial measures. A reconciliation of such measures to the most comparable GAAP financial measure is contained in our press release issued earlier today, which can again be obtained from our website at bioscrip.com. And now I would like to turn the call over to Rick Smith. Rick?

Thank you, Lisa. Good morning, everyone. Thank you for joining today's call. In the first quarter, we continued to move forward as a more focused and growing Infusion company. The benefits of the contributing Home Health, Cash Card and PBM businesses. We delivered solid revenue growth in our Infusion business and created significant momentum in our targeted therapies. For the first quarter, total company revenue increased 19% year-over-year, $155.6 million. Driving this was Infusion revenue, which was extremely strong at $109.1 million, up 18.9%. Our other businesses performed in line with expectations with Home Health down slightly and PBM on target. Gross profit for the quarter was $53.5 million or 34.4% of revenue compared to $51.4 million or 39.2% in the prior year. MJ will discuss the financial details shortly. Before we get into our discussion of the results, I want to give a status update of where we stand in executing our plan. In short, I'm very encouraged by what our team is delivering. In early 2011, we outlined our strategic assessment which pinpointed exactly what needed to be addressed at BioScrip and how we would position the company for the future growth and profitability. I'm pleased to report that a little over 1 year later, we remain on track with our plan. We continue to execute by focusing on the market segments in which we have meaningful strength and distinct competitive advantages. There's a real energy here and we are all driving towards the same goal, serving our customers, facilitating growth and improving margins and profitability. Last quarter, we provided an update that included a targeted annualized revenue of $600 million to $620 million and annualized adjusted EBITDA of $62 million to $65 million for the fourth quarter of 2012. I also stated last quarter that there would…

Good morning, Rick, and thank you. I'm delighted to join the BioScrip team especially at such an exciting time for the company. I look forward to working with Rick and the management team as the company continues to focus and execute on the strategic plans to drive growth in Infusion Services, optimize operational efficiencies and deliver consistent financial performance. I would like to extend my appreciation to Rick and the board for giving me this opportunity and to MJ for making herself available to ensure a seamless transition. In my past experience as a Senior Finance Executive for healthcare companies, I've had the privilege of working closely with the investor and analyst community and I'm eager to reengage with many of those who know me, as well as build new relationships. I look forward to meeting many of you in the coming weeks and months. With that, I will now turn the call over to MJ who would take you through the details of financials for the quarter. MJ?

Thank you, Hai, and good morning. With the divestiture of certain Pharmacy operations and related assets, we have changed the operating and reportable segments of the company, from Infusion/Home Health Services and Pharmacy Services to new operating and reportable segments, Infusion Services, Home Health services and PBM services. In addition to new segment reporting, the financial statements reflect continuing versus discontinued operations classification for all periods presented. For the first quarter of 2012, we reported revenue for continuing operations of $155.6 million compared to $130.8 million in the prior year period, an increase of $24.8 million or 19%. Infusion Services segment revenue for the first quarter is $109.1 million compared to revenue of $91.7 million for the same period in 2011, an increase of $17.3 million or 18.9%. Home Health services segment revenue for the period was $16.7 million compared to revenue of $17.2 million for the prior-year period, a decrease of $500,000 or 2.9%. This change resulted from a decrease in Medicare and TennCare home health rates for the calendar year 2012, as well as TennCare's 4.25% decrease in reimbursement effective July 1, 2011. The impact of these rate reductions on a year-over-year basis is $900,000 for the first quarter and was partially offset by growth in patient census. PBM services segment revenue for the period was $29.9 million compared to revenue of $21.9 million for the prior-year period. This increase in revenue of $8 million or 36.4% is due primarily to new customer relationships and an increase in volumes. These were partially offset by rate reduction on certain discount cash card business. Gross profit for continuing operations was $53.5 million compared to $51.4 million for the same period in 2011, an increase of $2.2 million or 4.2%. Gross profit as a percentage of revenue decreased to 34.4% from…

Thanks, MJ. I'd like to conclude by thanking the many people here who are working very hard to make BioScrip a more focused and streamlined company. Because of actions we've taken and others that are underway, we're on a clear path forward towards enhanced profitability and growth. Our overarching goals remain the same, to shift our corporate resources towards business lines where we have considerable strength, market awareness and offers distinct competitive advantages, maximizing our return on investment and long-term growth prospects. We believe BioScrip can be a long-term winner in the Infusion/Home Health space as a more focused, leaner and streamlined company. We're very pleased to have completed the divestiture. The transaction enables us to focus our resources on accelerating the execution of our plan. And finally, I would like to thank MJ for her numerous and significant contributions to BioScrip during her time as interim CFO. MJ joined our company at a critical time in BioScrip's history and provided invaluable support as we executed on various elements of our strategic assessments including most recently the sale of our Pharmacy Services asset. I know I can speak for the entire Board of Directors, the management team, and all the employees at BioScrip when I say we are truly grateful for all of her efforts and appreciate her staying on as a consultant to assist Hai with his transition into his new role. With that, operator, I'd like to open up the call for any questions.

[Operator Instructions] Our first question comes from the line of Brooks O'Neil from Dougherty and Company. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: I have a couple of questions. So I guess, I'll start at the gross margin line. Do you still think that a mid-to high 30s gross margin is achievable as you complete the transition?

We state our -- as we target and look at Q4, we don't have anything changing in that target. The important thing is that the 12% growth in the core therapies is the targeted therapies that we are focused on to drive the mix and the margins. And we are essentially on plan as it relates to our strategic plan moving towards Q4. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: Great. And then secondly, are you still thinking that there's somewhere in the range of $9 million annualized of sort of transition expenses that you might be able to eliminate as the year unfolds?

There's no might in that. There's an overlap in corporate that we've talked about in the last quarter. And I feel very confident. We're freeing up a number of our team, 60 hours of time now gets devoted towards eliminating the costs that we targeted, as well as essentially expanding our footprint and growing our Infusion division. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: Great. And then maybe, could you just talk a little bit about your expected use approaches. I did hear you say you have 6 LOIs which is tremendous and 3 de novos. Would you expect to use -- I mean, just talk about what you think you'll do with the $225 million.

We're consistent as it relates to the debt reduction that we talked about. Hai will drive that when he starts next week. And then we have also some earmarked for the Infusion expansion. And so we're consistent, staying consistent with our plan, and so we're also staying consistent in terms of the targeted range in terms of what we're looking to pay in terms of EBITDA multiples as well. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: Great. Do you think there'll be more de novos as a percentage of the total growth of the Infusion pharmacy? Or some balance between de novos and acquisitions?

It really depends on what we find available on the terms that are agreeable to us. And so what has driven the de novos in a couple of markets was really -- we needed to get something in place and we tried the acquisition route and some things were just too expensive for us and so we went down eventually began initiatives to open up a pharmacy out of the ground. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: Could you talk just a little about the economics of opening the pharmacy? What sort of time frame you expect those pharmacies could become productive?

It's been within 60 to 90 days of getting it started. And then our expectations are that we would have revenues ready to go day 1 of opening, but then some of additional working capital and startup costs involved in that period as well. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: So just a couple more quick questions. I noticed that at least in the first quarter you obviously didn't reverse your valuation allowance. Can you talk at all about your expectation for taxes in 2012?

MJ?

Yes. I'll speak to that, Brooks. You'll been seeing the activity for that in the second quarter when we recognize the gain on the transaction. And at that point in time, we'll be recording -- we'll be reversing part of that valuation allowance with that. We will probably use the majority of our federal NOLs and a significant piece of the state NOLs. And the expectation on the taxes is still consistent with what we discussed at year-end, in that we expect the effective tax rate to return to more normalized level in the third quarter. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: Great. And then one last question. I'm just curious, if I was reading the press properly there's approximately $144 million of assets associated with the discontinued business, that's still on the balance sheet. What's the outlook for those assets?

Most of that is accounts receivables that was retained of the sold businesses. Revenue growth was stronger in those businesses in the first period of this year. And so that resulted in a good increase and some opportunities to increase the net asset value that we have previously disclosed. So our -- we've brought on, beginning late last year, some additional outside resources to augment our internal staff in terms of collection efforts. And so they've been working the whole first quarter in the mail and community AR. And so our hope is within 60 to 90 days, we'll have a significant amount of that cash collected. Brooks G. O'Neil - Dougherty & Company LLC, Research Division: You'll retain it?

The cash will be retained to be redeployed into the corporate purposes.

Our next question is from Mike Petusky from Noble Financial.

A handful of questions. First question revolves around growth margin trends between now and the fourth quarter. Would you expect that between now and the fourth quarter, when you targeted kind of 36% to 37% gross margins that we'd see sequential gross margin improvement or is it just -- too dicey to actually predict that?

Well, we -- we're still on plan with our targeted Q4. Synergist, which is a seasonal therapy was in Q1 so that will drop off. But as we mentioned in our call, as part of the transition services related to certain customers in the -- that relate to the transaction, there will be some lower margin therapies that, consistent with Q1, that we'll be working to transition off during the second and into the third quarter a little bit as well. And I think if we can continue to drive our core therapies as we've planned to continue to move the mix, then we'll continue to march foreward with improvements towards our Q4 target.

Okay. So essentially it sounds like you're saying yes, but you will see some -- or at least you hope you'll see some sequential improvement between now and Q4?

Yes. Synergist will drop off from Q1 to Q2 and that will enable a path in terms of gross margins then offset by some of the transitional services revenue from the deal that we mentioned will continue. So there's some counterbalancing, but our goal will be to continue to drive the core therapy growth and improve the mix on the Infusion side to continue improve our margins towards our Q4 target.

Okay. And I just want a clarification. So when you guys had your last conference call, you said essentially you were guiding towards, I guess, kind of 7% to 9% growth and I believe, at that time combined Home Infusion, Home Health businesses, but my question is, is it possible for you guys to give even a rough range of guidance for the now 3 segments going forward in terms of growth?

Well, actually, what we said on the last call, Mike, was 7% to 9% just for Infusion. We expect Home Health to be flat to slightly up. And then the PBM, we said would be in the $100 million to $105 million for the total year. And so our -- as we said in the press release, I didn't necessarily cover it in my comments other than the fact that, the good thing is that we expected the strong growth in the core therapies and we hit it on plan and even up slightly sequentially to Q4, which I was very pleased to see. The other thing that we noticed positively and consistent with our strategic plan was really pair directed to home Infusion or alternate site of service in some of the chronic infusion therapies that we saw grow 25%. And so if that continues, then clearly, we're still marching to our Q4 targets but those are positive surprises that we saw on Q4 that is consistent with theme of the industry, the demographics moving the way of our industry. And also I think payors are looking for the more cost-effective side of service. And so I think that hopefully will continue and bode well for us as we continue to run to our Q4 target.

Okay. And I know I'm jumping around here but in terms of the appropriate level of bad debt reserve starting in Q4. I mean, is that a kind of a number somewhere 1.25% or 1.5% or is 2% a better number? How should we think about that?

It's below, targeted below 2%. I mean, this is an area that we have had a delay in terms of getting after it. We've actually are seeing beginning in Q2 some strong cash performance on the Infusion side and we've also augmented our existing staff with some outside resources to ensure that we continue to drive process stronger at the front end and essentially improve the performance of the cash there as well.

Is it fair to say it would be -- the normalized number would be somewhere above what had been historic which would be closer to 1%, 1.25% but well below the whatever 2.2% or 2.25% you just reported? Is that fair to say?

Yes. That is fair. Just because of the mix and the different billing related to Infusion versus historical combined businesses.

One of the things to mention to you Mike, we have a very disciplined approach on the reserves. So as we have any slippage in the aging, we consider that and take appropriate provision for it. And then we'll get people credit as they work through that. But we had a slight increase in the DSO for the quarter, about I think maybe 1.5 day. And the reason for this, it wasn't as much from the aging, it was really driven more from the industry wide changes in billings that it impacted all Infusion providers. And what we found, we were prepared for, it had to do some system upgrades for that. We were able to do our billings at the end of the year but what happened, a lot of the payors were having some problems accepting those billings. And so what happened because of that, we had a backlog in those rejected claims which was worked through in the first quarter but we'll be seeing that strong cash coming in on the second quarter. So I just wanted to give you little bit more color on that. It's not indicative of any other issues.

Okay. Yes, that's great. That's great. I'm not going to put this into my modeling. But in terms of the LOIs on the 6 Infusion sites. Can you give kind of a ballpark of the annualized revenues associated with those 6 facilities?

I think it's premature. I think we're -- if -- we're in our due diligence phase right now and I think if things go well, then we'll have something to report sometime soon.

You would actually make a press release on that if you closed some of those?

I think -- I'm not sure if we do that in terms of the materiality, but I think we would eventually give some way of notice in terms of our progress. But I think the main point say -- even though people were consumed with the deal, we took 6 people from our senior team and assigned a portion of their weekends and nights to essentially start hunting to get -- essentially get the pipeline built. And so we did a lot of multitasking. I think that hopefully from my comments, you understood and comprehend the enormity of peeling out that much of the legacy business the revenue and consuming the entire organization. And so at the same time, not breaking momentum on the growth of the revenue in the Infusion side. And essentially the -- and so it was important for us to continue to be ready with pipeline and with some active opportunities that we could act on and if we essentially are successful, have those ready to go by the time we hit Q4 as well. So everything is running hard and now as I've said we've got a lot of people that free up 60 to 70 hours a week. They just put 100% of their efforts into our strategic initiative.

Okay. And then just one more quick one. On the Tennessee Medicare, what was the dollar impact of the cut there? And actually, I honestly don't know what the cut was in Tennessee. Can you help me with that?

Yes. We were actually affected by 2 reductions from TennCare for this period, Mike, year-over-year because TennCare had the first 4.25% reduction effective July 1 of last year, then there was a second cut of 4.25% on January 1 this year. So we had the combined effect. As I've indicated, when you consider the Medicare and the 2 TennCare cuts all combined, it was about $900,000 for the first quarter. And I think the Medicare piece of that was about $500,000, the 2 TennCare pieces was about $400,000. Actually I reversed that. It was about $450,000 on the Medicare cut and roughly the same for TennCare. So the impact year-over-year, all go down by a couple hundred thousand when you hit Q3. But that impact will be there again for the second quarter. The Home Health segment did a good job on offsetting the impact of that through the increase in overall patient volumes. And the impact to adjusted EBITDA was not significant but they are continuing to look at other ways they can be more efficient in the delivery of care and the supported services in order to continue to increase their adjusted EBITDA performance.

[Operator Instructions] Our next question is from the line of Kyle Smith from Jefferies & Company. Kyle D. Smith - Jefferies & Company, Inc., Research Division: I just wanted to drill in a little bit more on use of proceeds. I think on the last call, you've said that you'd be taking out about $60 million of the notes, probably around to 109-ish kind of a price. Is that still your expectation? And what should we be expecting in terms of timing and process for that?

We start to be essentially working through and dealing with that. But I think we assumed a little bit about that range as part of our cash, use of proceeds cash. So what it ends up being will be determined in terms of actual execution of the process. So I think -- so far it's consistent with what we said the last time in terms of use of proceeds and then how the rest would go to expand our Infusion footprint and other corporate purposes. Kyle D. Smith - Jefferies & Company, Inc., Research Division: Okay. And is that something that we should be looking for, for some steps and action to be taken in the relatively near future? Or might it be a while before you move forward with that process?

Yes. I think we've -- our intent was just to assess in terms of where the process would be but I think that as we've earmarked that amount, I think Q2 will have some more clarity as to what -- as to the steps we would take in as well.

Yes. One of the things we mentioned, Kyle, as far as expectations, obviously, Hai needs to get started and go through the agreements and have some various meetings and do these assessments. But there are certain cost related to the revolver, for example, that are time sensitive. So he'll be evaluating that as far as making amendments or making changes there. There are also some time sensitivities, just certain requirements under the bond. So he'll be taking a close look at that and taking a look at that short-term versus long-term needs and with short-term versus long-term, it's probably even through the end of this fiscal year into next year. Short-term being this year. Kyle D. Smith - Jefferies & Company, Inc., Research Division: Okay, that's very helpful. And then MJ, just one last thing. You mentioned some industry wide issues with the payors. Is that the 5010 implementation and is that completely cleared up at this point?

It was that, as well as the D.0s and yes, for the most part we're seeing those resolved.

I'm showing that there are no further questions from the phone lines at this time. I would like to turn the call back to you Mr. Smith.

Great. Thank you everyone for joining today's call. Again, thank you to all our team in terms of really working hard to get closure to the deal. And also, just in terms of the effort, it's going to be necessary to be directed towards achieving our strategic objectives. And again, thank you to MJ for her great work and really adding a great value to us over the last year. And our goal has not changed, our plan has not changed. We continue to march towards what we've stated, we said we're going to do. We've done it and we'll continue to march to our plan and achieve our objective. So, thank you very much.

Thank you. Ladies and gentlemen, that does conclude the conference call for today. We thank you all for your participation and we ask that you please disconnect your lines. Thank you, everyone, and have a good day.