Bill Bunting – IR Rich Friedman – Chairman and CEO Rick Smith – President and COO Stanley Rosenbaum – EVP, CFO and Treasurer

Brooks O'Neil – Dougherty & Company Mark Arnold – Piper Jaffray Kyle Smith – Jefferies & Co. Mike Petusky – Nobel Research Tony Perkins – First Analysis Akshay Madhavan – Redwood Capital Matthew Buten – Catapult

Ladies and gentlemen, thank you for standing by. Welcome to the 2010 first quarter conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator instructions) As a reminder, this conference is being recorded today, Friday, April 30, 2010. I’d now like to turn the conference over to Bill Bunting, Investor Relations for BioScrip. Please go ahead, sir.

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, you may access it through the Investor Relations section at our Web site. Rich Friedman, Chairman and Chief Executive Officer; Stanley Rosenbaum, Executive Vice President and Chief Financial Officer; and Rick Smith, President and Chief Operating Officer will host this morning's call. The call is expected to last about 45 minutes and may be accessed through our Web site at bioscrip.com. A replay of the conference call will be available shortly after the call. Interested parties can access the replay by dialing 800-633-8284 in the United States or 402-977-9140 for international caller, and entering access code 21467687. Before we get started, I'd like to remind everyone that any statements made on the conference call today or in our press release that express a belief, expectation, anticipation or intent, as well as those that are historical fact, are considered forward-looking statements and are protected under the Safe Harbor Act of the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to BioScrip today and the company assumes no obligation to update these 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. Forward-looking statements are qualified by the inherent risk and uncertainties surrounding future expectations generally and may materially differ from the actual future experience. Risks and uncertainties that could affect forward-looking statements including the failure to realize synergies as a result of operational efficiency or revenue opportunities, and the risks that are described from time to time in BioScrip’s reports filed with the SEC, including BioScrip’s annual report on Form 10-K for the year ended December 31, 2009. Also the company urges caution in considering any trends or guidance that may be discussed on the conference call. The pharmacy services, home infusion, and home health industries are competitive and trends and guidance are subject to various factors, risks and influences, which are described in the company's periodic reports filed with the SEC. In addition, as required by Regulation G, the reconciliation of non-GAAP financial measures mentioned during our call today to the most comparable GAAP financial measures can be found in statement 3 of today's press release. That schedule is available on our Web site under the link ‘News’ found in the ‘About Us’ section at our home page at bioscrip.com. Thank you, and now I'd like to turn the call over to Rich Friedman. Rich?

Thank you, Bill, and good morning everyone. We are extremely pleased that we are able to close the Critical Homecare Solutions transaction in the first quarter. We are now focused on delivering the profitability we committed to. In the first 30 days, the acquisition is meeting all of our expectations. We welcome the CHS family to BioScrip. In all visits to the various CHS locations we are struck by the team’s dedication and professionalism. The integration process is right on schedule and the identified synergies are being achieved on time. In fact, we have identified additional cost of goods savings. We are already realizing the cross-selling opportunities we envisioned. Rick will provide you with more details in a few moments. A combined basis, we can now offer a true continuum of care model encompassing all delivery technologies infused, oral and injected to better manage each patient. The vast majority of transaction related expenses are now behind us. We are keenly focused on execution. As you can all appreciate, consummating a strategic acquisition of the scope and scale of CHS required an enormous amount of time and effort by a significant number of key management personnel. Amidst all the acquisition rated activities, we also run the business during the quarter, and I want to talk specifically about a few items, both positive and negative, that impacted the results. We experienced a soft January and February. Going into 2010, two low margin PBM accounts were not renewed and certain existing traditional mail accounts were renegotiated at lower rates. In addition, we experienced typical industry seasonality. These declines were to be offset by previously contracted new business. However, the timing of the new business and a return to normalized patient utilization levels from post year-end seasonality did not occur until March, later than expected. In March, specialty revenues increased by approximately $23 million or 22% compared to the average of January and February. This includes $5 million of revenues from CHS, representing only four days in the quarter. March and April revenues are back to expectations. Regarding expenses, in the 2010 first quarter, we reserved an additional $1.5 million for the CAP business that ended in 2008. Stan will address this later in the call. The company reported expenses of $1.2 million, which includes acceleration of certain employee benefits, increased temporary staffing and other expenses that were incurred in the first quarter, which in 2009, were expensed throughout the year. Future quarters in 2010 should not be burdened with these expenses. In comparing Q1 2010 to Q1 2009, you will note that we invested approximately $1 million between the expansion of our sales organization and new management, primarily infusion focused. This investment is beginning to yield results. Lastly, with CHS onboard, the new business that has commenced, and the return to normalized patient utilization levels, we are reaffirming our 2010 guidance; revenues between $1.67 billion and $1.73 billion and EBITDA of $67 million to $71 million. I will now turn the call over to Rick to give you more details on the business and the integration process.

Thank you, Rich. Good morning. We are very excited about the CHS acquisition and I want to give you an update on the integration progress and the outlook for the balance of the year. On the cost side, we are exceeding our targets. In fact, we have identified an additional $1 million in cost of goods savings. The annual projected cost synergies are now $8.3 million, $5 million of which we expect to realize in 2010 and the full balance will be realized in 2011. The integration plan continues to progress as originally designed. The cross functional teams are meeting all expectations. The clinical programs are being combined and best practices are being established. Our senior team has completed a deep dive review of sales and operations. We have confirmed the opportunities for growth in the CHS platform from the relationships. Our business shows a solid organic growth we expected and from where we have focused our resources. The specialty business grew 9% year-over-year excluding the UHG, HIV and transplant programs. Included in this growth was a 44% increase in our oncology programs, a 9% increase in Iron Overload, and a 13% increase in the MS category. Our infusion business grew 19% organically year-over-year and 34% year-over-year including the CHS revenues. The growth in the specialty segment reflects the additional contributions from our pay relationships, pull-through activities from the investment and the increased sales force added in the second half of 2009 and from CHS. While we saw good growth in the specialty areas year-over-year, we were expecting more infusion revenue in Q1 on business that was expected to begin in January and February. The traditional business was delayed and did not begin until March. However, based on the strength of our programs, our managed care pipeline and now the additional CHS managed care relationships, we expect to continue to see growth throughout the year. The decline in our traditional pharmacy services segments reflects the loss of two customers and the renegotiation of contracted pricing, offset by growth in our cash card programs. The net result lowered year-over-year revenues by $2.6 million. We look to mitigate this decrease in revenue this year as we have identified opportunities to grow this segment. Since the merger, we have generated infusion and specialty revenues from patient referrals that previously each company would have turned away due to lack of contract access. In addition, we have provided the CHS employees education and in-service training on the specialty pharmacy programs that BioScrip has developed. As a result, we are seeing a large percentage of patients from this process that we can bring on to service in our company. The CHS acquisition continues to open up new revenue opportunities for BioScrip. There is now more to discuss and present in terms of infusion and specialty clinical programs and offering physicians a comprehensive solution for all their patient needs. We have begun to win new business as a result of the acquisition. We recently signed two managed care agreements in separate Midwestern states due to our clinical programs and our expanded footprint. We continue to aggressively attack the managed care market. As we have previously reported, we have a national agreement with the United Healthcare and I am pleased to report we now have a national agreement with Humana for infusion services. We are pursuing pull-through strategies for these and other MCO agreements. We're also reviewing the MCO agreements we have acquired for specialty pharmacy opportunities. Access to specialty pharmaceutical pipeline is also a critical component of our strategy and value proposition. We continue to add new products to the portfolio of limited distribution products and we are excited now that we originally have been awarded access to five new specialty drugs, XIAFLEX, Ampyra, Stelara, Vpriv and Histocle [ph]. We continue to offer physicians and patients access to new products. We offer our pharma partners a trusted clinical expert in the delivery and management of these complex therapies. Access to these drugs and incorporating them into our programs provides us future revenue sources. We've also begun to expand our patient management programs to assess and offer appropriate technology solutions to payers that focus on improved quality of life and outcome measurements. For the second quarter, we will continue to focus on cross-selling initiatives, expanding our brand recognition in all markets, expansion of our center of excellence models in all strategic business units. We work to successfully build our leadership position in new drugs awarded to us. We will continue our focus on offering cash flow generation through increased revenues, higher margin business and effective operating performance levels. We are refining our operating benchmarks to improve overall operational efficiencies of the combined company. We have built a powerful operating platform with clinical excellent programs and a motivated employee base to reach our potential. With that I'll turn it over to Stan.

Thank you, Rick, and good morning. Today, we reported a first quarter loss of $7.2 million and a pretax loss of $9.5 million. Included in these results are $8.8 million of one-time costs. Of this amount, $7.3 million is the non-capitalized costs associated with the CHS acquisition. In addition, we provided for an addition $1.5 million bad debt expense related specifically to the CAP business that terminated in 2008. While we continue to pursue the collections aggressively, we believe they’re prudent to set up this additional reserve. It is important to note that we continue to collect on these receivables. Sales for the quarter were $335 million as compared to $326 million for the same period last year. Last year’s numbers include $17 million of United, HIV and organ transplant programs which were taken in-house by United in the early part of 2009. Without these programs, sales growth year-over-year was 8.6%, primarily in our specialty segment. This quarter also includes $5 million of CHS from March 26 through the end of the quarter or four billing days. As Rich and Rick mentioned earlier, we experienced softness in revenues in January and February as a result of normal reductions due to seasonality in the quarter and the renegotiated contracts in our traditional pharmacy segment. While these were anticipated, we expected to offset this with new business that did not materialize until March. March revenues came in at anticipated levels and there is positive momentum heading into the second quarter. Gross margin for the quarter was 11.6% as compared to 11% for the same period of 2009. The increase is primarily due to the inclusion of CHS. Without CHS, margins increased slightly despite the impact of AWP and other price concessions as a result of favorable mix as we continue to focus on higher margin therapies. Let me say a few words on the drop in margin from the fourth quarter. As stated above, we made certain pricing adjustments in our traditional mail segment that we anticipated. We stand by our guidance that full-year margins will increase to around 16% as a result of the inclusion of CHS and continued focus on higher margin therapies over the remainder of the year. Operating expenses increased $13.5 million from the same period a year ago. Included in this increase are the one-time costs of $6.5 million or $5 million of transaction related expenses and the CAP bad debt reserve of $1.5 million. CHS costs for the stub period were $1.5 million. In addition, operating expense included increased broker fees associated with our traditional mail segment of $900,000 as a result of increased cash card revenues, a return to normalized bad debt provision of $800,000 and an acceleration of employee expenses into the first quarter that will be recovered later in the year of $800,000. The balance of the increase, approximately $1 million, represents our investment in our sales force and new additions to our management team primarily in the infusion area. As a result of the above, we reported a loss from operations of $6.3 million as compared to $4.3 million profit in 2009. Adjusted EBITDA was $2.7 million reflecting the impact of one-time events. Interest expense for the quarter was $3.2 million and includes a $2.5 million fee from the financing of the CHS acquisition. Due to the treatment of the one-time costs associated with the acquisition, it's a discrete item for tax purposes. Our tax rate in the quarter was 24%. Over the course of the year, we believe our effective tax rate will normalized in the 40% range. Taking a look at our balance sheet and the purchase accounting for CHS acquisition, based on our preliminary valuation of the intangible assets acquired, we have recorded $44.9 million of intangible assets. We want to remind you that we will continue to work on the evaluation of the intangible assets and have up to 12 months to finalize these values. CHS first quarter results are in line with expectations, as revenues were $65.8 million and gross profit was approximately 48%. I will now turn the call back to Rich.

Thank you, Stan. We are extremely excited about the opportunity in front of us and we are committed to delivering value to all of our stakeholders. Operator, please open the lines for questions.

Thank you. (Operator instructions) Our first question comes from the line of Brooks O'Neil from Dougherty & Company. Please proceed with your question. Brooks O'Neil – Dougherty & Company: Good morning. Can you hear me okay?

Yes, Brooks.

Good morning.

Good morning. Brooks O'Neil – Dougherty & Company: Good morning. Congratulations on closing the CHS transaction. Obviously, I guess, some investors will focus on sort of the first quarter results to just get a better picture on exactly what's happening in the business. And I just want to be sure I understood some of the facts that you mentioned. It sounded to me if I heard you correctly like there was only about $2.6 million of reduced revenue related to some of the unusual nonrecurring factors you mentioned. Is that the right number or was it more significant than that?

On a net basis related to the traditional side, yes. Brooks O'Neil – Dougherty & Company: And that was related to these two terminated contracts and the pricing concession on the mail contracts that you alluded to?

Yes. As it relates to the traditional pharmacy segment, it was a net reduction of about $2.7 million that was related to the two contracts that were missed and then also the left outs and then also renegotiation of the traditional business.

Yes, let's just give you some of the detail behind it. There was $2 million affecting the quarter on renegotiation. In addition to that it was very low margin PBM business which was approximately $4.5 million. That was a business that was not renewed. Just to make sure everybody understands, we forecasted that into our numbers way up front, and we knew about it. It’s in our guidance and it was expected. The only thing that delayed us is really a timing impact and we want to make sure everybody understands that. It was strictly timing of the seasonality and the timing of the new business that started. We did anticipate it coming in earlier and that’s why March came back and April to the levels that it is at today. Brooks O'Neil – Dougherty & Company: :

This is the timing delay. We expected the – we expected the business to come through; the business came through in late February into March. We also were able to see some good new patient generation from the referral sources attached to this business. And so we definitely believe that we will make this up the rest of the year. We are disappointed that it didn’t come over when it started but sometimes when you get these new opportunities the transfer of the patients and the beginning of the new business doesn’t always begin on time. So it is the ebb and the flow and so our expectation is that we will see – that we project that there is about $10 million of revenue yet to get in terms of the timing impact of this the rest of the year. Brooks O'Neil – Dougherty & Company: Great. And then did I hear you correctly to say that the gross margin at CHS acquisition impact would have been around 11%. Is that the number you used?

No. We said that they were at about 47%, 48% in the first quarter.

Yes, I think what Stan was referring to when we talked about the 11.6% in the first quarter and comparing that to the 11.1% or there about, in the quarter of 2009, a significant portion of that increase was the utilization of CHS with only four billing days. So you can all see the impact of adding CHS, which is everything that we planned. So only four days has brought up that margin significantly and that’s why we’re on 11.6%, which is why we're forecasting for the year at 16% for the balance of the year on a combined basis. Brooks O'Neil – Dougherty & Company: Sure. And then in the G&A expense, Stan, you walked through some things, but if I was hearing you correctly, maybe you can just walk through the G&A expense sort of unusual one-time items one more time.

Sure. The biggest item was about that, the $800,000 of expenses that we took in the first quarter that traditionally would have been spread over the course of the balance of the year. That was essentially due to the payment of bonus in the first quarter of 2010. There was no bonus paid in 2009, so that accelerated the 401(k) and all of the taxes related – payer related taxes as well. That was planned and budgeted for over the course of the year. It just got accelerated into the first quarter. Brooks O'Neil – Dougherty & Company: And then there was about $1 million of spending related to increased sales people and management.

Well, certainly as Rick had said in earlier calls that we have strengthened us sales force. We have doubled our sales force over the last 12 months. We have added significant strength of our management team, and that's the impact this quarter versus first quarter of last year.

Brooks, one other thing. In addition to the $800,000 that Stan has mentioned and that is really the benefit portion that move forward on a 401(k) and other areas. There were additional items in there, such as temporary staffing that we incurred, one working on a CHS transaction, pulling some pharmacists out, having to replace with other ones that we’re taking out at this point in time. In addition, we held regional meetings in order to get ready for the CHS transaction, a number of teachings we brought people together and that cost is about $250,000, which is not going to repeat in the future quarters, which is how we got to the $1.2 million that we talked about earlier. Brooks O'Neil – Dougherty & Company: Okay. That’s great. Thank you very much.

Thank you.

Our next question comes from the line of Mark Arnold with Piper Jaffray. Please proceed with your question. Mark Arnold – Piper Jaffray: Good morning. I guess I am still very confused. So maybe kind of adding to some of the questions Brooks had. You just talked about the revenue weakness on the traditional pharmacy side. Can you just break out, I know this isn’t something you normally do until the 10-Q, but can you just give us the breakdown between the traditional pharmacy services revenue and the specialty pharmacy revenue?

Sure. Traditional pharmacy was $48.8 million and specialty was $286.3 million. Mark Arnold – Piper Jaffray: Okay. So that’s a little bit helpful. I guess, so you saw relatively flat if we just look sequentially here, specialty pharmacy was flat. The decline in revenue really on a sequential basis came from traditional pharmacy. I guess that’s where there is a little bit of confusion on my part. I am surprised that the gross margin declined as much as it did sequentially even though most of the loss here was on the traditional pharmacy side. Not on the specialty pharmacy side. Can you explain that a little bit?

:

And the other bigger item obviously was the price concessions that we talked about earlier.

– which is dollar to dollar. Mark Arnold – Piper Jaffray: Okay. Just on the gross margin number, can you give us a sense, since it looks like March was more reflective of what we are going to see for the rest of the year. Can you give us a sense of what the gross margins looked like in March?

It was around 11.6% inclusive of CHS. Mark Arnold – Piper Jaffray: In March?

Yes, because they only had four billing days of CHS. Mark Arnold – Piper Jaffray: :

Mark, it is not. It is not reflective – Mark Arnold – Piper Jaffray: Can you give us a sense as to how much of an improvement we saw in March?

Mark, it will not be reflective of what you see going forward because it only included CHS for four days. When you include them for the entire month we would see somewhere in the 17% to 18% margin is what we anticipate, which is why we said that the full year will come in around 16%. Mark Arnold – Piper Jaffray: Okay. So let me ask this one more time a different way. If we exclude CHS from your first quarter completely, I calculate a gross margin of 11.0%?

11.1% is what it worked out to, that is correct. Mark Arnold – Piper Jaffray: So if we assume that and then we exclude that CHS four days in March, I mean obviously your March results on your legacy BioScrip business were better than January and February. And so on that legacy business were we looking at a number more like 11.8%, 11.9% in March, or was it still close to – or was the margin really relatively consistent in January, February and March on the legacy business.

Yes, Mark, as Rick pointed out much of the infusion business started later than was initially anticipated. So as we bring in the higher margin infusion therapies, you're going to see that creep up. The growth in March came from all areas, came from both the injectable as well as the infused side. So as this new business continues to come in, you are going to see the margins on the old legacy business creep up. I don’t think we believe that it will get because of the combined mix with the rest of the injectable business has a lot of the new products that Rick was talking about to mainly level. But it definitely will creep up and in our forecasting it’s exactly what Stan said. We are looking at 18% or around 18% per quarter going forward with the inclusion of CHS. Obviously, if we could improve on that by focusing in on higher margin therapies, we're obviously going to do that. Mark Arnold – Piper Jaffray: Okay. 18% is the number there, Rich? Not 16%.

: Mark Arnold – Piper Jaffray: Okay. I understand. So going forward as we think of Q2, through the last three quarters here, you are expecting gross margins to be around 18%.

That is correct. Mark Arnold – Piper Jaffray: Okay. That’s helpful. I’ll just leave it there on that question. Then I guess a couple other pieces. Just as it relates to the adjusted EBITDA number, I am sure this has to do with what’s allowed in your debt agreements. But why are you only adding back $5 million of the $7.3 million of financing fees to your adjusted EBITDA calculation?

Because the other 2.3 million is in interest expense and would not be part of the calculation to begin with. Mark Arnold – Piper Jaffray: Okay. That makes sense. And then – and we will see some of that, is that just amortization?

Of the $21 million in fees that we paid, I believe, around $12 million was deferred financing, so that will go into the amortized of the five years of the new debt. Mark Arnold – Piper Jaffray: Okay. And then just – maybe just one more clarification on the other $1.2 million of the accelerated employee benefits, you did walk through some numbers Stan that I just want to make sure I understood. First of all, accelerated benefits, what is that?

Normally when people get their salaries paid during the course of the year we match their 401(k) program over the course of when they would get their salaries. We paid our employer taxes as it relates to when they would earn that. But because the bonus was paid out in the first quarter it accelerated the 401(k) match and various taxes associated with it into the first quarter. It was an expense that we would have had over the course of the year. It just got accelerated into the first quarter. Mark Arnold – Piper Jaffray: Okay. That makes sense. I’ll leave it there and let somebody else ask a few questions. Thank you.

Thank you, Mark.

(Operator instructions) The next question comes from the line of Kyle Smith with Jefferies & Co. Please proceed with your question. Kyle Smith – Jefferies & Co.: Hi, good morning gentlemen, and congratulation again on the CHS acquisition.

Thank you, Kyle. Good morning. Kyle Smith – Jefferies & Co.: So a lot of numbers have been thrown around here about the impact in the first quarter, and I just wanted to make sure that I am distilling everything correctly. So your EBITDA comp was down about $3.5 million year over year. We talked a lot about the $1.2 million of the 401(k) match and these other accelerated benefits expenses, temporary staffing and stuff. I also believe that last year in the first quarter you were not accruing bonuses. They all got accrued in the fourth quarter. So that maybe another $1 million, $1.2 million of expense and then we’ve got the $1 million in expanding your management in sales infrastructure much of which was in anticipation of the merger which leaves maybe a couple hundred thousand dollars of everything else in the business. Am I capturing everything?

We can’t report – what you are saying I guess from your standpoint is correct. Obviously we cannot accrue it that way, but the analysis that you are using I could understand. Kyle Smith – Jefferies & Co.: Okay. You are referring to the bonus fees. So is, I think, $4.3 million of bonuses that you accrued in the fourth quarter –

Of course. Kyle Smith – Jefferies & Co.: And then in normal course – sorry.

You're absolutely right. We took it in the fourth quarter which is the way that we need to account for it under normal circumstances. It would have been spread evenly among the year. Kyle Smith – Jefferies & Co.: Right.

As you recall, we added over the last nine months or last year about 10 senior people with infusion, operations, sales and reimbursement as well as clinical expertise. Since last first quarter, so that is correct. Kyle Smith – Jefferies & Co.: Okay.

In addition to the doubling of the sales force the second half of last year. Kyle Smith – Jefferies & Co.: Yes, absolutely. Lot of that infrastructure build out is related to the anticipation of the CHS business coming into the platform, correct. So once you see that earnings reflected it should get absorbed.

Yes. Kyle Smith – Jefferies & Co.: Excellent. And I had a question about the bad debt expense around CAP. You terminated that business over a year ago. I am just wondering why the expenses is showing up now?

Let me take that Kyle. We had a business with CMS, Competitive Acquisition Program under Medicare Part B, which terminated at the end of 2008. We still have $7.6 million of receivables on our book with the reserve of $4.2 million. All right? One of the problems that we’ve run into is that under this program, essentially the matching of the doctors – the doctor, administration as well as our submission to CMS had to be matched. It’s becoming very difficult with CMS and their payment agent to get the two of them to match. We have taken a deep dive into the receivables. We believe we have the correct reserve now. And we’re aggressively pursuing that. What’s important here is that over the last month or two we have collected close to $700,000, $800,000 on this and continued to collect every day. So we believe we are adequately reserved right now. Kyle Smith – Jefferies & Co.: Okay.

One other thing related to that. And just so everybody is clear, the gross receivable outstanding is around 7 as Stan said. The net receivable is about 3. So we have reserved $4 million for it. This is not a question whether they owe us the money because they do. We met every obligation under the contract. Right now it’s only a matter of making sure that the docs submit the right claims. But by reserving as much as we did, we believe that we’re more than adequately covered. Kyle Smith – Jefferies & Co.: Okay. And I know that reserve reflects your best estimates of what’s ultimately going to be recoverable, but is there also some upside in that number where you might be able to if things go well collect some of that $4.2 million reserve as well?

: Kyle Smith – Jefferies & Co.: Excellent. And then my last question relates to the CHS integration. It sounds like it’s going well over its month. That's great to hear. I just to want make sure I got the numbers right. The improved cost synergies you were previously looking for I think was around $7 million. Now you are looking for you said $8.3 million, $5 million of that’s to be realized this year?

Yes, about $7.3 million originally. And we are about $8.3 million is our current estimate. Clearly, we continue to look for more opportunities in terms of the cost of goods and other ancillary supply items and costs between both organizations as a result of the increased purchasing power we now have. Kyle Smith – Jefferies & Co.: Excellent. And on the revenue synergy front, I know you are very hopeful that those would be quite material, although you didn't pro forma in any expectations into the materials around the bond deal. I think I may have heard some comment about $10 million of revenues that could be achievable this year. Is that tied into those synergies?

Some of it may be, but we actually – that’s related to the timing delay on the newer contracts. I think on the cross selling side as I talked about, we aggressively went after it post-closing and we identified just within a short period of time, three weeks, about 30 patients came on to service that we’re not able to take. It was about $140,000 in revenue. We also within the last couple weeks or last week essentially when we did the in-service education of the CHS employees and outlined for them our programs, we’ve actually seen about 20 patients come in during the last week with a high percentage of those being able to be serviced. So it’s really – they are not big numbers out of the gate. But they are numbers that essentially showing us proof of concept as we can increase the awareness of all of our programs as a combined company in all the markets in which we serve and all the pay relationships we have then I think we have an excellent chance to build some good momentum and leveraging all of our assets in this company.

And Kyle one other thing. Qualitatively as we went around and met with the team of CHS, being able to handle the patient and all their medicine and the full management of that patient is what they're welding their arms to that. They see incredible opportunities. We were being told by a number of nurses that they have patient that is could be on as many as 13 medicine that they're all able to handle a few of those medicines. So this gives us an incredible opportunity as what we’ve talked about on the road show. Kyle Smith – Jefferies & Co.: Excellent, wonderful. Well, best wishes for continued success on that front.

Thank you.

Our next question comes from the line of Mike Petusky from Nobel Research. Please proceed with your question. Mike Petusky – Nobel Research: Good morning.

Hi, Mike. Mike Petusky – Nobel Research: Few questions. I am really just trying to keep up here. Earlier and forgive me if you’ve clarified that but earlier you said vast majority of your deal expenses are behind you. In terms of what we should be looking at, I guess in Q2 and then beyond, I mean will we start seeing completely clean numbers in Q3 and what’s left in Q2?

Q2 you will have registration as we register the notes as we go forward here. By Q3, we should be very clean.

There'd also be some of the people that were helped for transitional purposes. They will leave and so those charges severance related items will come through as well.

And we are talking about small numbers overall. Mike Petusky – Nobel Research: Okay. I mean, small numbers being a million or two or less than that?

No, less than that. It’s probably going to be in hundreds to few hundred thousand dollars at most. Mike Petusky – Nobel Research: All right. And then earlier I was trying to take notes here. You said two new managed care agreements and then you seem to include some infusion services with Humana. Humana was included in those two new managed care agreements? Is that right?

No, Humana actually came with the CHS acquisition. Mike Petusky – Nobel Research: Okay.

The two newer ones that we had been working on and were essentially keying it up prior to the acquisition with our relationships that we had and as part of having a location that are now in pharmacy in those states. It enabled to us get access to the panel. Mike Petusky – Nobel Research: Okay, all right. And just trying to do some quick math here. Based on what you said about the March revenue in specialty, I guess that number in March was about $110 million. Is that right?

Just on specialty? Yes.

A little bit higher, but close. Mike Petusky – Nobel Research: Okay. About $110 million? So, if I am looking at say, trying to model Q2 out, I can essentially multiply that $110 million by three, maybe 48 or so of PBM and then maybe 60 of incremental CHS. I mean, is that a decent way to be thinking about this or at least to start to think about it?

We won’t tell you how to do your model. Mike Petusky – Nobel Research: I understand, but –

Let us say this. We think it is fair to say. We had a very soft January and February and we said that $23 million came back in March, included in the $5 million, which board accepted at $335 million, $5 million of the $335 million came from the CHS side. So we see the same exact momentum coming into the second quarter. We believe that the second quarter I think has one less billing day – one more billing day. So this second quarter should be much more reflective of what we have seen in the March month than obviously in the January and February. Mike Petusky – Nobel Research: Okay. So then if some of that was – some of that –

And we also gave you the first quarter of CHS, right, earlier in our comments. Mike Petusky – Nobel Research: Okay. Let me try to clarify this. So if you are saying essentially then some of that January and February business came back in March, really then March wasn’t – really – I really shouldn’t take that $110 million as kind of a run rate going forward that the real run rate may be 100 or something like that.

No, it’s higher. Mike Petusky – Nobel Research: It’s higher. Okay. All right. Let me go back with this then. I really want to try to clarify this then. Okay. Let’s say it will be higher than $110 million. The PBM business, is it 48 or is it really softer than that because some of that – some of those renegotiated pieces and the two that weren’t renewed impacted somewhere in the middle of the quarter. So the really the run rate is 45 or 42 –

Let’s do this. Okay? Because I believe we owe it to you for the first quarter. So let’s say this because of the softness. In January and February, the total of those two combined months was approximately $205 million. Okay? Mike Petusky – Nobel Research: Yes.

We ran $335 million for the quarter. $5 million of that was CHS. In those numbers, you had about $48 million, $49 million of traditional and PBM. Okay. I think that’s what we could do with the roadmap. Mike Petusky – Nobel Research: Okay. All right. Okay. Thanks, guys.

Thank you.

Your next question comes from the line of Tony Perkins from First Analysis. Please proceed with your question. Tony Perkins – First Analysis: Good morning, guys.

Good morning.

Good morning, Tony. Tony Perkins – First Analysis: I’m trying to understand just a little bit better and I’m relatively new to the story. So I apologize if you’ve gone through some of this. But the business that was delayed until March was mainly infusion business is what I heard. And was this one specific contract or a number of contracts working in tandem? And then also, was this delay – delay of anything to do with the anticipated CHS acquisition or is that completely separate?

Yes, it is separate. I mean, the infusion work was the delay in expected business. We saw other softness due to the normal post year-end seasonality utilization. And so the expected infusion business to come in was related to some existing business where we are expected to receive a transfer of patients due to a preferential position on the panel as it relates to some of the clinical therapies, clinical programs. So we were essentially delayed in going to receive those patients. Tony Perkins – First Analysis: Okay. So this delay is something that we should look at as more of a one-time. It happened. It’s over. We shouldn’t expect these types of delays going forward as far as you can tell.

Yes. As we said, the timing difference, we had expected to come in earlier in the quarter or beginning of the year – closer to beginning of the year. And essentially it got delayed. So – and we also have seen new patients revenue generation coming from the transferred business and the relationships associated with the transferred business on the referral side. So our people are running very fast essentially taking care of the timing difference. Tony Perkins – First Analysis: Okay. All right. That’s all I had. Thanks, Rick.

Thank you.

Your next question comes from the line of Mark Arnold from Piper Jaffray. Please proceed with your question. Mark Arnold – Piper Jaffray: Thanks for the additional clarification, Rich, just on the revenues in the quarter. It’s very helpful. So, as we think about this, I guess I kind of look at where you are at now and you are probably even a little ahead of where I was expecting you to be in Q2 just in terms of the run rate. So to me, that’s real positive. I guess I had just a couple follow-up questions on the infusion business, Rick. First of all, when you talk about the United Health contract and the national contract there, did that have any negative impact or positive impact on the United Health pricing for the CHS business?

No, it has not. I mean, I think that there were some CHS locations that were not a contracted provider. And so there are – some of the businesses that they had was without a network rate – so net contracted rate. I think that what we should see in – and as we’ve dialed it into our plant, we will see the opportunity to have secured, a very effective and strong license to hunt in all their markets. So there was – there is really not a significant amount of United Healthcare business in the CHS business as well. Mark Arnold – Piper Jaffray: Okay, great. So there is opportunity there now that you have that contract for them to pursue new patients.

Significant opportunity, yes. Mark Arnold – Piper Jaffray: Okay. And then just this is really more on the legacy BioScrip business and your infusion efforts there. But can you just give us an update on the hiring of sales reps in kind of all the infrastructure – the infusion infrastructure you were starting to build last year and kind of where you are at with that and to what extent are we seeing the full benefit of that investment in the numbers now, and how long is it going to take for that to continue to ramp up?

We’ve added a number of sales reps in each of our East Coast and our West Coast markets. And I think that in terms of the senior management team, in sales, operations and systems, as well as the reimbursement side, we added those people pretty much from March of last year through even November of last year, so essentially anticipation of the CHS acquisition. And even before the CHS acquisition looking to transform a good portion of our company to hire mixed infusion model, we added those people in the senior leadership. So we have been identifying additional sales reps that we have brought on in different markets with relationships, and so the contribution from those people has been very good. And as we identify others that have significant amounts of books of business that they can bring to us through their relationships, then we will look to add any self-funding asset in our sales territory. Mark Arnold – Piper Jaffray: Okay. So you kind of view those new hires that you make in the sales side as really being self-funding from day-one, kind of bringing up the referral –?

Our focus is to get themselves make sure they are self-funding within really the first 60 days as it takes time for them to bring them over, re-educate the referral sources and move them. And then within those 60 days, if we’re not seeing a fully self-funding projection, then we move pretty quickly on reversing our decision. But I think that those are our expectations in terms of those types of assets. Mark Arnold – Piper Jaffray: Great. Thank you, guys.

Our next question comes from the line of Akshay Madhavan from Redwood Capital. Please proceed with your question. Akshay Madhavan – Redwood Capital: Good morning. Thank you for taking the questions. My first question has to do with your share count. Can you give us the diluted share count post the acquisition, please?

In the first quarter, we have 40,825,000. There is no dilution in the quarter because we reported a net loss. However, the total shares outstanding are about 53.5 million shares. Akshay Madhavan – Redwood Capital: Great, thank you. The second question has to do with your synergies. If I just sort of take the CHS and BioScrip businesses from 2009 and add up the two EBITDAs, I get to a 68 number. It sounds like you expect $5 million of synergies and you have the midpoint of your EBITDA guidance for this year is $68 million. Am I thinking about that the right way? And can you explain why that is?

Sure. We’ve put out numbers. When we put everything together, we talked about the renegotiations. We talked about other things that obviously that we forecasted in there that had somewhat of an adverse impact to offset by the new business coming in. We wanted to obviously put numbers out there that were achievable that we feel comfortable with. We know that a bunch of the synergistic numbers, even though we’ve put $5 million into the forecast, is a bunch of them that are going to occur in 2011. As an example, the full year impact of the cost of goods sold type of benefits. So obviously, our job is to exceed what is out there. And we wanted to put numbers out there that we all feel comfortable with from a revenue, gross profit and EBITDA standpoint. What you are saying makes a lot of sense, and we’ve put out numbers that we felt very comfortable with. Akshay Madhavan – Redwood Capital: To be clear, the $5 million of synergies expected in 2010 should affect adjusted EBITDA in 2010, correct?

Yes

Yes. Akshay Madhavan – Redwood Capital: Okay. The third question, and I think Kyle was trying to get there, but it would be very helpful if you could just articulate it clearly. If you could just provide a simple EBITDA bridge from the $6.2 million EBITDA number in 2009 to the reported $2.7 million adjusted EBITDA number in 2010 or at least the three or four large items, it would be very helpful.

Starting at $6.2 million, we had the adjusted for – the traditional mail business was about $1.7 million. Akshay Madhavan – Redwood Capital: And that’s are all to the bottom line?

Yes. UHG – the loss at the UHG business, about $1.2 million; a return to normalized bad debt rates of about $700,000; the incremental employee wages would take up about most of the balance of the difference that is the 750 and the investment that we made in our management and sales force. But what we will do to make sure – we are actually looking at some schedules putting out together. We’ll refine that and get that out to you. Akshay Madhavan – Redwood Capital: Via an 8-K?

It would be in a Q. Akshay Madhavan – Redwood Capital: Okay. Fantastic. That would be extremely helpful. I just want to make sure I understand the – I'm sorry to repeat this, but – so $1.7 million, I understand, from the traditional loss. The $1.2 million UHG, can you clarify exactly what that was?

Yes. We had said earlier in the call that United Healthcare took in-house their HIV and organ transplant business that we had in the prior – the first quarter of last year. That was – Akshay Madhavan – Redwood Capital: And there should be no – there should be no sequential impact in the second quarter. Is that correct?

That is correct.

That is correct. It’s a first quarter – Akshay Madhavan – Redwood Capital: Great. Thank you very much for taking the questions.

(inaudible) Thank you.

Our next question comes from the line of Matthew Buten with Catapult. Please proceed with your question. Matthew Buten – Catapult: Hi, thanks for taking my question. Couple questions. One, you have a 67 to 71 range. Maybe can you talk about what the variables are to get from the lower end, which seems like is very achievable given the balance of the year to the upper end, I mean, with the first quarter number? I’m trying to understand how – what the variables are to get to that number.

Well, we got this in a number of different ways, even taking into account the first quarter actual results. When we look at where CHS is today, and again we are extremely comfortable with where they are at, our current run rates of where we are today and the margins, the new business that is coming in, it gets us right to the numbers that we’ve put out on the forecast. So – and that takes into account the first quarter impact. So I’m not sure I have with me more details in responding to that, but it is where we are today if we just take internally the current run rate on BioScrip’s business with CHS’s current run rate of where they are, taking into account some of the synergies that we know exist, we get right to the numbers that we’ve put out there. And that, again, excludes, as Kyle pointed out, it does not include any of the revenue synergies and that was not built into any forecast. Matthew Buten – Catapult: May I take one of the – there is clearly quite a bit of reaction to both the top and the bottom line. I don’t know if you guys have thought about maybe doing a better job at describing pacing. Is there anything unusual about the pacing for the balance of the year? I mean, you kind of need to get up to a $20 million sort of EBITDA run rate and then grow that from there sequentially to hit the low end of the range. Is that what you guys are thinking? And I’m talking quarterly.

Yes, we expect to ramp up in the second, third and fourth quarter that we get to somewhere in the $60 million range. When you have the first quarter of three and then you have the $5 million of synergies, that gets us right back to where we would expect, but we’ve put out there in the 67% of the run rate. Matthew Buten – Catapult: And have you thought about maybe giving at least some better sequential – I mean, I know you guys really from February and then now we’ve got this essentially reiterate, and yet you’re looking at the substantial decline in market value. And part of it is the surprise of all these things happening in the first quarter, and it’s – so I don’t know if you can help yourself by being a little more particular with – you know, what are your thoughts on it?

Okay. Look, we appreciate the comment. We really do. Timing – we built into our forecast somewhat of the timing and we did anticipate an early start with the new business. We are back to the levels that we anticipated. You are correct. There is no way to go around it that we are disappointed in the timing of the new business starts. The pacing is back on track. We expect from this point to go forward. It wasn’t unusual. Seasonality in this business is not unusual, and we’ve built that in. So I think – and I appreciate your comment, and I think we could probably a better job of communication and we will walk on that going forward. But we are extremely comfortable with where we are today. We are extremely comfortable with the addition of CHS and the growth opportunities that Rick has pointed out. We have the new contracts started. We are very comfortable with what we’ve put out there. But I appreciate your comment that we will do a better job. Matthew Buten – Catapult: Thank you.

Mr. Bunting, there are no further questions at this time.

Thank you, operator. And we really appreciate everybody joining us today. We thank you for your participation. We really truly look forward to reporting on the future results. We believe there is incredible opportunity in front of us. Again, we welcome the CHS family into BioScrip, and we are starting something very special. Again, thank you very much.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation, and also you please disconnect your lines.