Option Care Health Reports Financial Results for Fourth Quarter and Full Year 2021 and Announces Two Additional Acquisitions
The Company also announced that it acquired
Fourth Quarter 2021 Financial Highlights
- Net revenue of
$927.2 million , up 15.2% compared to$804.7 million in the fourth quarter of 2020 - Gross profit of
$212.2 million , or 22.9% of revenue, up 15.5% compared to$183.8 million , or 22.8% of revenue, in the fourth quarter of 2020 - Net income of
$75.5 million , or$0.42 earnings per share inclusive of a one-time benefit from the elimination of the Company's valuation allowance on deferred tax assets of$30.4 million or$0.17 per share, compared to net income of$17.8 million , or$0.10 earnings per share, in the fourth quarter of 2020 - Adjusted EBITDA of
$86.8 million , up 28.3% compared to$67.7 million in the fourth quarter of 2020 - Cash flow from operations of
$65.3 million , and cash balances of$119.4 million at the end of the fourth quarter Acquired Infinity Infusion Nursing, LLC and Wasatch for$50.0 million and$17.8 million , respectively, financed through cash balances on hand
Full Year 2021 Financial Highlights
- Net revenue of
$3,438.6 million up 13.4% compared to$3,032.6 million in the full year 2020 - Gross profit of
$779.6 million , or 22.7% of revenue, up 14.2% compared to$682.3 million , or 22.5% of revenue, in full year 2020 - Net income of
$139.9 million , or$0.78 earnings per share, compared to net loss of$8.1 million , or$0.04 loss per share, in full year 2020 - Adjusted EBITDA of
$289.8 million , up 30.7% compared to$221.7 million in full year 2020 - Cash flow from operations of
$208.6 million , up 63.7% compared to$127.4 million in full year 2020
Full Year 2022 Financial Guidance
For the full year 2022,
- Net revenue of
$3.65 billion to$3.85 billion - Adjusted EBITDA of
$310 million to$330 million - Cash flow from operations of at least
$230 million
The financial expectations do not include any impact from the acquisition of SPNN as it has not yet been completed.
Conference Call
The conference call can be accessed by dialing (866) 360-3136 for
About
Investor Contacts
| 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
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: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings; (iii) results of litigation; and (iv) the loss of one or more key payers. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our
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, and restructuring, integration and other expenses. As part of restructuring, integration and other expenses, 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 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 the attachment to this earnings release.
Schedule 1
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
| 2021 | 2020 | ||||
| ASSETS | |||||
| CURRENT ASSETS: | |||||
| Cash and cash equivalents | $ | 119,423 | $ | 99,265 | |
| Accounts receivable, net | 338,242 | 328,340 | |||
| Inventories | 183,095 | 158,601 | |||
| Prepaid expenses and other current assets | 69,496 | 70,806 | |||
| Total current assets | 710,256 | 657,012 | |||
| NONCURRENT ASSETS: | |||||
| Property and equipment, net | 111,535 | 121,149 | |||
| Intangible assets, net | 21,433 | 23,429 | |||
| Referral sources | 344,587 | 327,623 | |||
| 1,477,564 | 1,428,610 | ||||
| Other noncurrent assets | 125,543 | 89,616 | |||
| Total noncurrent assets | 2,080,662 | 1,990,427 | |||
| TOTAL ASSETS | $ | 2,790,918 | $ | 2,647,439 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| CURRENT LIABILITIES: | |||||
| Accounts payable | $ | 279,246 | $ | 282,913 | |
| Other current liabilities | 180,449 | 151,110 | |||
| Total current liabilities | 459,695 | 434,023 | |||
| NONCURRENT LIABILITIES: | |||||
| Long-term debt, net of discount, deferred financing costs and current portion | 1,059,900 | 1,115,103 | |||
| Other noncurrent liabilities | 95,437 | 82,589 | |||
| Total noncurrent liabilities | 1,155,337 | 1,197,692 | |||
| Total liabilities | 1,615,032 | 1,631,715 | |||
| STOCKHOLDERS' EQUITY | 1,175,886 | 1,015,724 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,790,918 | $ | 2,647,439 | |
Schedule 2
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| Three Months Ended |
Year Ended |
||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| NET REVENUE | $ | 927,194 | $ | 804,713 | $ | 3,438,640 | $ | 3,032,610 | |||||||
| COST OF REVENUE | 714,997 | 620,951 | 2,659,034 | 2,350,346 | |||||||||||
| GROSS PROFIT | 212,197 | 183,762 | 779,606 | 682,264 | |||||||||||
| OPERATING COSTS AND EXPENSES: | |||||||||||||||
| Selling, general and administrative expenses | 136,777 | 123,001 | 525,707 | 500,199 | |||||||||||
| Depreciation and amortization expense | 14,648 | 16,418 | 63,058 | 71,310 | |||||||||||
| Total operating expenses | 151,425 | 139,419 | 588,765 | 571,509 | |||||||||||
| OPERATING INCOME | 60,772 | 44,343 | 190,841 | 110,755 | |||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Interest expense, net | (14,286 | ) | (23,668 | ) | (67,003 | ) | (107,770 | ) | |||||||
| Other, net | 481 | (2,270 | ) | (7,344 | ) | (8,228 | ) | ||||||||
| Total other expense | (13,805 | ) | (25,938 | ) | (74,347 | ) | (115,998 | ) | |||||||
| INCOME (LOSS) BEFORE INCOME TAXES | 46,967 | 18,405 | 116,494 | (5,243 | ) | ||||||||||
| INCOME TAX (BENEFIT) EXPENSE | (28,500 | ) | 566 | (23,404 | ) | 2,833 | |||||||||
| NET INCOME (LOSS) | $ | 75,467 | $ | 17,839 | $ | 139,898 | $ | (8,076 | ) | ||||||
| Earnings (loss) per share, basic | $ | 0.42 | $ | 0.10 | $ | 0.78 | $ | (0.04 | ) | ||||||
| Earnings (loss) per share, diluted | $ | 0.41 | $ | 0.10 | $ | 0.77 | $ | (0.04 | ) | ||||||
Schedule 3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
| Year Ended |
|||||
| 2021 | 2020 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
| Net income (loss) | 139,898 | (8,076 | ) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operations: | |||||
| Depreciation and amortization expense | 68,804 | 77,896 | |||
| Paid-in-kind interest capitalized as principal | — | 7,525 | |||
| Other non-cash adjustments | 11,237 | 42,917 | |||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable, net | (4,273 | ) | (3,924 | ) | |
| Inventories | (22,700 | ) | (42,725 | ) | |
| Accounts payable | (10,381 | ) | 59,215 | ||
| Other | 25,984 | (5,436 | ) | ||
| Net cash provided by operating activities | 208,569 | 127,392 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
| Acquisition of property and equipment | (25,632 | ) | (26,875 | ) | |
| Other investing cash flows | — | 541 | |||
| Business acquisitions, net of cash acquired | (85,909 | ) | — | ||
| Net cash used in investing activities | (111,541 | ) | (26,334 | ) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
| Proceeds from debt | 855,136 | — | |||
| Retirement of debt obligations | (910,345 | ) | (174,000 | ) | |
| Net proceeds from issuance of common stock | — | 118,934 | |||
| Deferred financing costs | (10,339 | ) | (149 | ) | |
| Other financing cash flows | (11,322 | ) | (13,634 | ) | |
| Net cash (used in) financing activities | (76,870 | ) | (68,849 | ) | |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 20,158 | 32,209 | |||
| Cash and cash equivalents - beginning of the period | 99,265 | 67,056 | |||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | 119,423 | 99,265 | |||
Schedule 4
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES
(IN THOUSANDS)
(UNAUDITED)
| Three Months Ended December 31, |
Year Ended |
|||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||
| Consolidated net income (loss) | $ | 75,467 | $ | 17,839 | $ | 139,898 | $ | (8,076 | ) | |||||
| Interest expense, net | 14,286 | 23,668 | 67,003 | 107,770 | ||||||||||
| Income tax (benefit) expense | (28,500 | ) | 566 | (23,404 | ) | 2,833 | ||||||||
| Depreciation and amortization expense | 15,984 | 17,842 | 68,804 | 77,896 | ||||||||||
| Consolidated EBITDA | 77,237 | 59,915 | 252,301 | 180,423 | ||||||||||
| EBITDA adjustments | ||||||||||||||
| Stock-based incentive compensation | 3,329 | 332 | 9,575 | 2,920 | ||||||||||
| Loss on extinguishment of debt | 984 | 3,196 | 13,387 | 11,545 | ||||||||||
| Restructuring, acquisition, integration and other | 5,200 | 4,208 | 14,543 | 26,788 | ||||||||||
| Consolidated adjusted EBITDA | $ | 86,750 | $ | 67,651 | $ | 289,806 | $ | 221,676 | ||||||
Source: Option Care Health, Inc.