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News Release

Option Care Health Announces Financial Results for the Third Quarter Ended September 30, 2023

October 25, 2023 at 7:00 AM EDT

BANNOCKBURN, Ill., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Option Care Health, Inc. (the “Company” or “Option Care Health”) (Nasdaq: OPCH), the nation’s largest independent provider of home and alternate site infusion services, announced today financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Financial Results and Highlights

  • Net revenue of $1,093.0 million, up 7.1% compared to $1,020.9 million in the third quarter of 2022
  • Gross profit of $254.3 million, or 23.3% of net revenue, up 16.6% compared to $218.0 million, or 21.4% of net revenue, in the third quarter of 2022
  • Net income of $56.3 million, or $0.31 basic earnings per share, up 45.0% compared to net income of $38.8 million, or $0.21 basic earnings per share, in the third quarter of 2022
  • Adjusted EBITDA of $109.8 million, up 28.2% compared to $85.6 million in the third quarter of 2022
  • Cash flow from operations of $61.0 million compared to $87.0 million in the third quarter of 2022
  • Cash and cash equivalents balance was $386.5 million at the end of the third quarter of 2023

John C. Rademacher, Chief Executive Officer, commented, “The Option Care Health team continues to execute on outstanding clinical outcomes and extraordinary patient care, which helped translate into solid financial results in the third quarter. I am excited to build on this momentum as we close out the year and look forward to seeing the impact we believe the team will make in the post-acute and ambulatory setting in the years to come.”

Updated Full Year 2023 Financial Guidance

For the full year 2023, Option Care Health expects to generate:

  • Net revenue of $4.23 billion to $4.28 billion
  • Adjusted EBITDA of $420 million to $425 million
  • Cash flow from operations of at least $350 million, inclusive of the Amedisys merger termination fee net of merger-related expenses

Additionally, the Company anticipates an effective tax rate of approximately 27% and net interest expense of approximately $52.0 million to $54.0 million.

Conference Call

Option Care Health will host a conference call to discuss its third quarter 2023 financial results later today at 8:30 a.m. EDT. The conference call can be accessed via a live audio webcast that will be available online at https://investors.optioncarehealth.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

About Option Care Health

Option Care Health is the nation’s largest independent provider of home and alternate site infusion services. With over 7,500 team members including more than 4,500 clinicians, we work compassionately to elevate standards of care for patients with acute and chronic conditions in all 50 states. Through our clinical leadership, expertise and national scale, Option Care Health is reimagining the infusion care experience for patients, customers and team members. To learn more, please visit our website at OptionCareHealth.com.

Investor Contacts

Mike Shapiro Bob East, Asher Dewhurst, Jordan Kohnstam
Chief Financial Officer Westwicke
T: (312) 940-2538 T: (413) 213-0500
mike.shapiro@optioncare.com optioncarehealth@westwicke.com


Forward-Looking Statements - Safe Harbor

This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we may make regarding future revenues, future earnings, regulatory developments, market developments, new products and growth strategies, integration activities and the effects of any of the foregoing on our future results of operations or financial conditions.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: changes in laws and regulations applicable to our business model; changes in market conditions and receptivity to our services and offerings; pending and future litigation; potential liability for claims not covered by insurance; and loss of relationships with managed care organizations and other non-governmental third party payers. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our periodic reports as filed with the SEC.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

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, stock-based compensation expense, loss on extinguishment of debt, and restructuring, acquisition, integration and other. As part of restructuring, acquisition, integration and other, the Company may incur significant charges such as the write down of certain long‑lived assets, temporary redundant expenses, professional fees, potential retention and severance costs and potential accelerated payments or termination costs for certain of its contractual obligations. Management believes that Adjusted EBITDA provides useful supplemental information regarding the performance of Option Care Health’s business operations and facilitates comparisons to the Company’s historical operating results. We have not reconciled Adjusted EBITDA guidance to net income as management believes creation of this reconciliation would not be practicable due to the uncertainty regarding, and potential variability of, material reconciling items. For a full reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, please see below.


  Schedule 1

OPTION CARE HEALTH, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)(UNAUDITED)
 


  September 30, 2023   December 31, 2022
ASSETS      
CURRENT ASSETS:      
Cash and cash equivalents $ 386,489   $ 294,186
Accounts receivable, net   382,957     377,542
Inventories   251,366     224,281
Prepaid expenses and other current assets   95,473     98,330
Total current assets   1,116,285     994,339
       
NONCURRENT ASSETS:      
Property and equipment, net   107,960     108,321
Intangible assets, net   20,868     22,371
Referral sources, net   323,126     341,744
Goodwill   1,540,246     1,533,424
Other noncurrent assets   135,131     112,737
Total noncurrent assets   2,127,331     2,118,597
TOTAL ASSETS $ 3,243,616   $ 3,112,936
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
CURRENT LIABILITIES:      
Accounts payable $ 429,536   $ 378,763
Other current liabilities   194,548     186,588
Total current liabilities   624,084     565,351
       
NONCURRENT LIABILITIES:      
Long-term debt, net of discount, deferred financing costs and current portion   1,057,016     1,058,204
Other noncurrent liabilities   122,433     103,278
Total noncurrent liabilities   1,179,449     1,161,482
Total liabilities   1,803,533     1,726,833
       
STOCKHOLDERS’ EQUITY   1,440,083     1,386,103
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,243,616   $ 3,112,936


Schedule 2

OPTION CARE HEALTH, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)(UNAUDITED)
 


  Three Months Ended September 30,   Nine Months Ended September 30,
    2023       2022       2023       2022  
NET REVENUE $ 1,093,014     $ 1,020,918     $ 3,177,934     $ 2,917,522  
COST OF REVENUE   838,748       802,917       2,443,834       2,281,685  
GROSS PROFIT   254,266       218,001       734,100       635,837  
               
OPERATING COSTS AND EXPENSES:              
Selling, general and administrative expenses   158,214       142,015       459,644       417,771  
Depreciation and amortization expense   15,005       15,268       44,417       46,027  
Total operating expenses   173,219       157,283       504,061       463,798  
OPERATING INCOME   81,047       60,718       230,039       172,039  
               
OTHER INCOME (EXPENSE):              
Interest expense, net   (11,786 )     (13,997 )     (38,816 )     (39,008 )
Other, net   824       5,360       88,594       7,956  
Total other (expense) income   (10,962 )     (8,637 )     49,778       (31,052 )
               
INCOME BEFORE INCOME TAXES   70,085       52,081       279,817       140,987  
INCOME TAX EXPENSE   13,783       13,258       69,904       37,960  
NET INCOME $ 56,302     $ 38,823     $ 209,913     $ 103,027  
               
Earnings per share, basic $ 0.31     $ 0.21     $ 1.17     $ 0.57  
Earnings per share, diluted $ 0.31     $ 0.21     $ 1.16     $ 0.57  
               
Weighted average common shares outstanding, basic   178,826       181,884       179,956       180,829  
Weighted average common shares outstanding, diluted   180,528       183,022       181,286       181,760  


Schedule 3

OPTION CARE HEALTH, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)(UNAUDITED)
 


  Nine Months Ended September 30,
    2023       2022  
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income $ 209,913     $ 103,027  
Adjustments to reconcile net income to net cash provided by operations:      
Depreciation and amortization expense   46,423       49,723  
Other non-cash adjustments   54,259       66,999  
Changes in operating assets and liabilities:      
Accounts receivable, net   (5,075 )     (23,153 )
Inventories   (28,362 )     (52,749 )
Accounts payable   50,726       129,859  
Other   (7,558 )     (49,614 )
Net cash provided by operating activities   320,326       224,092  
       
CASH FLOWS FROM INVESTING ACTIVITIES:      
Acquisition of property and equipment   (21,981 )     (17,111 )
Business acquisitions, net of cash acquired   (12,855 )     (87,315 )
Other investing activities   (5,889 )      
Net cash used in investing activities   (40,725 )     (104,426 )
       
CASH FLOWS FROM FINANCING ACTIVITIES:      
Purchase of company stock   (175,108 )      
Proceeds from warrant exercises         20,916  
Other financing cash flows   (12,190 )     (4,537 )
Net cash (used in) provided by financing activities   (187,298 )     16,379  
NET INCREASE IN CASH AND CASH EQUIVALENTS   92,303       136,045  
Cash and cash equivalents - beginning of the period   294,186       119,423  
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 386,489     $ 255,468  


Schedule 4

OPTION CARE HEALTH, INC. 
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES
(IN THOUSANDS)(UNAUDITED)
 


  Three Months Ended September 30,   Nine Months Ended September 30,
    2023     2022       2023       2022
Net income $ 56,302   $ 38,823     $ 209,913     $ 103,027
Interest expense, net   11,786     13,997       38,816       39,008
Income tax expense   13,783     13,258       69,904       37,960
Depreciation and amortization expense   15,622     16,474       46,423       49,723
EBITDA   97,493     82,552       365,056       229,718
               
EBITDA adjustments              
Stock-based incentive compensation   9,235     4,005       22,908       12,581
Restructuring, acquisition, integration and other (1)   3,029     (934 )     (74,383 )     6,282
Adjusted EBITDA $ 109,757   $ 85,623     $ 313,581     $ 248,581

(1) Restructuring, acquisition, integration and other for the nine months ended September 30, 2023 includes the Amedisys merger termination fee, net of merger-related expenses

 


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Source: Option Care Health, Inc.